Vietnam businesses predict continued price rises

Prices will continue to rise in coming months as food producers’ input costs climb, Ho Chi Minh City business leaders warned Sunday.
Vietnamese consumers have been hit hard by rising prices this year.
Inflation in Vietnam hit a 12-year high of 15.67 percent in February and, at a meeting Sunday, business leaders warned the price of food and consumer goods will continue to creep up.
Faced with higher input costs, some producers are reducing or abandoning production altogether.
A decrease in the production of food and other consumer goods will only add to upward price pressures.
Bui Duy Duc, managing director of Vissan, the country’s biggest meat and vegetable provider, said the price of pork, a staple for Vietnamese families, had skyrocketed since the Tet lunar new year festival, with a record set every second day.
He said pork was currently selling at VND42,500 (US$2.66) a kilogram, twice the price of a year ago.
Duc said the availability of pork was set to decline because many pig farmers have quit, unable to continue raising pigs because of higher costs.
HCMC Foodstuff Association General Secretary Nguyen Chi Nguyen predicted that between now and October the price of vegetables would rise by 4 percent, the price of pork by 1.31 percent, the price of rice by 0.87 percent and the price of meat by 0.85 percent.
Nguyen said the higher prices were the result of changes in the global market combined with higher interest rates and the higher value of the dong against the US currency.
After the government increased interest rates, many local businesses encountered difficulties getting and servicing loans from banks.
Although business groups have complained of the burden of higher interest rates, government officials have yet to outline any solutions for local businesses.
And it’s not just humans that have to tighten their belts as prices rise.
Do Van Vinh, General Director of Saigon Aquatic Product Trading Joint Stock Company (APT), said.
His company had cut back on the amount of food fed to its fish.
Fish now received just meal one day instead of two.
Vinh said his company was paying VND800 million ($50,000) for 100 tons of fish food each day.
He said earlier this year the company had estimated it would earn at least VND3 billion ($190,000) from exporting seafood.
With the increase in costs, the company now expected to lose that amount, he said.
The business community asked the government to take urgent action to save local businesses.
Huynh Van Hai, general director of Bao Long Foodstuff and Technology Company, said the state should consider reducing taxes, such as value added and corporate income taxes, to save businesses from bankruptcy.