Goods prices soaring on more expensive dollars, threatening production

The prices of various goods, both imported and domestically made, have been increasing sharply. This has worried both the producers, who fear the rise of production costs, and consumers, who fear the rise of food prices.

Structural steel producers and traders are keeping a close watch on the changes in the dollar price . They say with the current dollar price, they are incurring the losses of 80,000-150,000 dong per ton, though the world steel ingot price has been stable at $580 per ton. A steel mill has revealed it would raise the sale price next week, at least by 150,000 dong per ton, in order to break even.

Nguyen Van Thien, Chair of Vietnam Cement Association, said the Vietnam Cement Corporation raised the sale price by 50,000 dong per ton earlier last week, because the input material price has increased sharply due to the more expensive dollar. He said cement plants are facing big difficulties partially because of the shortage in coal supply which has made them unable to set up production plans or forced them to scale down their production.

The prices of gas and fertilizer have already increased. Le Quoc Phong, Deputy Chair of the Vietnam Fertiliser Association, said the urea price has increased by one million dong per ton to 7.1-7.3 million dong, while DAP is now selling at 12 million dong per ton, a sharp increase of three million dong per ton, and kali is selling at 8.5-9 million dong (+1.5 million dong). Meanwhile, fertilizer producers have threatened to raise the sale prices by another 10 percent in the time to come, i.e.when they will be selling the new consignments of imported goods.

Gas trading companies have also warned that the prices will increase in November following the world price increases. Gas is now sold at $750 per ton in the world market, an increase of $55 per ton over October. It is expected that the retail price would increase by 15,000 dong per 12 kilo tank.

The prices of consumer goods seem to react slowly to the dollar price increases. However, there are signs of the new wave of food price increases. Supermarkets said that suppliers of liquor, drinks and sweets raised the prices by 5-10 percent already in late August. And now producers have also warned they would raise prices.

Nguyen Anh Hong, General Director of Maximark, said that it is highly possible that the retail prices would increase in November. Meanwhile, Nguyen Huu Tuan, Manager of Citimart Binh Thanh, said several days ago, suppliers quoted the price increase of five percent for beer and cosmetics. Unilever’s cosmetics prices have also increased by five percent, while some suppliers of coffee and sweets have informed of the 5-10 percent price increases.

Saigon Co-op has also confirmed that it has received the notice on price increases from the suppliers of sweets, aluminum-made products and clothes. These products use import materials, therefore, the production costs have increased due to the higher dollar.

At traditional markets, according to Nguoi lao dong, the prices of consumer goods, including footwear, clothes, sugar and vegetable oil have increased by 5-15 percent. Small merchants at Binh Tay Market in HCM City said that the prices of goods sourced from China have increased most sharply due to the appreciation of the yuan.- Nguoi lao dong

Tags: Vietnam Goods prices