With the sudden hike of petroleum prices beginning January 14, the stability of goods prices before the Lunar New Year or Tet holiday becomes more difficult. Although the market has not yet started the frenzy purchasing for Tet, prices of many goods in the two big markets of Hanoi and Ho Chi Minh City are gradually increasing.
According to the Market Department, following the economic development, people’s lives have improved, thus most people do not spend much for feasts during the Tet holiday. However, because of Vietnamese’s customs, families will buy enough food which is specific to Tet such as rice cake, pork pie, confections and preserved fruits, fresh or processed foodstuffs. Therefore, the demand of the above-mentioned goods will still be high during the pre-Tet days. In addition, some other factors such as the limited supply and the price hike of input materials can make some commodities’ prices higher.
Standing worries of price hike
Gasoline prices at the chain of Petrolimex stations increased by VND450 per litre. Other traders are also planning to increase selling prices at different times and price levels. The proposal to raise retail prices of gasoline and kerosene products by the Vietnam National Petroleum Corporation (Petrolimex) has been approved by Ministries of Finance and Industry and Trade. Accordingly, the new pump prices of A92 and A95 increased to VND16,400 and VND16,900 from the previous prices of VND15,950 and VND16,450.
Petroleum companies explained that the price increase is to avoid heavy loss resulting from the world’s price hike. However, this is considered to be a sensitive decision at the time. The price hike of petroleum and kerosene will lead to the increase in price of other goods.
Besides, prices of some goods, which are not affected by Tet, are also on the rise. The prices of powder milk products increased sharply. The Ministry of Finance has sent an urgent dispatch to ask provinces and cities to tighten control on prices of goods particularly milk products. The prices of powder milk products in Vietnam are much higher than those in the world. Despite the Ministry of Finance’s inspection team raising its voice, many milk companies have raised their product prices by 7 -9 % since January 9.
The ministry’s inspectors also said that it is necessary to reconsider the gas retail price because the price is being floated. Currently, gas traders decide retail prices by themselves and there has not been a management mechanism of gas prices.
Most consumers raise their concern about the price hike of agricultural products, foodstuff and processed agricultural products. Unlike the previous years when the price race usually started mid-December, this year many companies and individuals providing goods planned to raise prices in lunar November. So far this year, apart from fresh vegetables, prices of other agricultural products have increased sharply. Cereals increased by VND5,000-VND6,000 per kilo, rice by VND20,000 per ten kilos, dried bamboo shoots, cat's ear and field mushroom all increased by 30 % against last November.
Almost all necessities have been adjusted to increase 10 %-20 % on average. Thus, people are worried that prices of goods will continue to rise following the price hike of petroleum. Providers explained that the price hike was attributed to the price hike of material imports, foreign currency rate, and petroleum price increase resulting in the rising transport fees.
How to stabilise price?
The consumption demand is forecast to increase 20 %-40 % during the Tet holidays. However, the Ministry of Industry and Trade’s Market Department affirmed local enterprises are willing to serve the residents’ increasing demand.
Vu Vinh Phu, Chairman of the Hanoi Supermarkets Association said there is a popular tendency to purchase in supermarkets and trade centres while they can only supply 15 %-20 % of goods. Both Hanoi and Ho Chi Minh City have already had funds for price stability of reserving Tet goods.
Enterprises have financially supported for goods reverves. There will likely be other price hikes from now till Tet holidays, however the prices will not on a sudden increase like the previous years, he noted.
Nguyen Thai Dung, Vice Director of Hanoi-based Big C Thang Long said his supermarket had been asked by providers to raise goods prices. However, he said, we have not yet increased prices because the providers’ proposal is unreasonable. Supermarkets like Big C, Metro, Intimex have planned to reserve goods for Tet with total costs of VND1 trillion.
Hanoi Industry and Trade Department said that there have been 12 enterprises receiving support with loan interests of 0 % to contribute to stabilize prices during the upcoming Tet holiday. They have reserved 4,510 tonnes of rice, 2,240 tons of poultry and cattle, 6,500 eggs, 940 tons of frozen seafood, 2,174 tons of processed foodstuffs, 2,183 tons of vegetables and fruits, 3,200 litres of cooking oil, 118 tons of sugar and 80 tons of confections and preserved fruits.
Particularly, to timely provide and meet the demand of goods during Tet, Hanoi authorities have instructed relevant authorities to allow transport vehicles to carry necessary goods for Tet of eight enterprises to operate all day.
Ho Chi Minh City has paid in advance VND422 billion from its budget for 13 enterprises with priority interest of 0 % within six months to reserve goods for Tet. At the same time, these enterprises are being asked to sell at a price10 % lower than products of the same kind on the market during the days before Tet. The southern city’s consumption demand is forecast to increase by 30 %-40 % and will mainly focus on foodstuffs, flowers, bonsais and beverage. However, market managers reassured that despite the increasing demand, the sudden price hike and partial lack of goods will not occur at shops of enterprises who attended the price stability process.
The purchasing demand in other localities is forecast to not increase sharply. The market purchasing power is forecast to increase about 20 % against 2009. Departments of Industry and Trade have made their reports on price stability work, plans to reserve goods particularly necessary foodstuffs. Some measures have been offered including interest of 0 % within one and a half months to serve the demand for Tet or support of expenses for Tet sales.
Kim Nhung
Vietnamese
