Prices to rise on hundreds of items

Imports prices have been escalating despite the dollar price decreases. Meanwhile, price tags on domestic goods have risen even more sharply as input materials also become more expensive.

Fivimart, Intimex and Citimart in Hanoi have reported that their suppliers warn of rising prices during the last few weeks.

The retailers have revealed that, after Tet, suppliers announced slight price increases of 3-5 percent for imported products, and now they plan to raise the rates of domestic goods around 10 percent.

“We have received notice on raising prices from some 20 domestic suppliers of different products, from food and consumer goods to cosmetics,” a representative of Intimex noted. “If counting imported products, there will be some 200-300 items to have their prices increased.”

Meanwhile, Fivimart chain owner Vu Thi Hau remarked: “Domestic suppliers have all called each other and asked each other to raise prices together. We cannot refuse the increases.”

Suppliers point to the rising costs of input materials, which has led to higher production costs. Additionally, the basic wage for workers will also increase starting in May 2010, making labor costs rise as well.

Supermarkets have all confirmed that no suppliers will decrease prices on imports, even though the dollar has been decreasing. Actually, prices on some kinds of imports have even rised further on top of the after Tet increases, some by 10 percent.

“Suppliers of plastics and household electric appliances sourced from South Korea and China have announced price increases, reasoning that import prices have increased,” a representative from Intimex reported.

Prices on other kinds of imports remain unchanged despite the dollar price drop. Food importers claim that since they imported these products earlier when the dollar price was high, they must still sell at high prices to ensure profits.

Other importers acknowledge that the dollar price has dropped, but explain that they cannot lower prices because they must borrow money from banks at high interest rates.

A representative of Minh Anh Company, which specializes in food import and distribution in Hanoi, has maintained that price policies need to be built up over time.

“Though the import tariff and dollar price have decreased, businesses still face many other risks. Transport fees, basic wages and CPI are still on increase,” he detailed.

An import company director who asked to remain anonymous, noted that importers are benefiting highly from the dollar price decrease and reduce prices. Under the current price management scheme, they deliberately avoid slashing prices.

“If some big suppliers dominating the market would lower prices, then the smaller suppliers will be forced to follow their example. But now, when big suppliers all keep quiet and increase prices, no one wants to make a move,” he explained.

Tags: Vietnam price, Vietnam prices