Milk Prices Remain High in Vietnam

DESPITE FALLING COSTS
HO CHI MINH CITY, Nov 5 Asia Pulse - Retail milk prices remain high in Vietnam even though the cost of raw materials has decreased by half in recent months.
Dairy importers say the prices of imported full-cream and skimmed milk powder have fallen by 40-50 per cent to around US$3,400 per tonne and US$2,800-3,000.
But the retail price of milk remains at 85,000-159,000 VND (US$9.5) for a 400-gramme can depending on the brand, up at least 20,000 VND this year.
A 900-gramme can costs 179,000-400,000 VND (US$26), up to 50,000 VND higher.
Nguyen Muoi, a milk distributor in HCM City's District 3, said the current milk prices are the highest ever.
Huynh Dong Tuan, manager of Citimart Supermarket, said he has yet to receive information from milk producers and distributors about cutting prices.
Last month milk sales fell by 50 per cent due to the melamine scare. To stimulate demand, the dairy industry offered gifts to buyers rather than cut prices.
Deputy general director of Vietnam Dairy Milk Joint Stock Company (Vinamilk), Tran Bao Minh, said though raw material prices have fallen, Vinamilk cannot cut prices because the prices of cans and butter have increased by 50 and 80 per cent.
Furthermore, the dollar has strengthened and workers salaries have gone up, he said.
Truong Van Toan, head of Dutch Lady Vietnams legal and external department, said his company does not plan to cut milk prices until year-end.
Analysts say since milk is an essential item, consumers buy irrespective of price.
With Vietnamese consumers believing price is linked to quality, milk producers and distributors always find ways to hike prices, they say.
Though retail prices are high, local dairy farms are not benefiting. Several household farms in HCM Citys Cu Chi and Hoc Mon district say dairy companies pay them just 5,400-7,300 VND (US$0.4) per kg of fresh milk.
With animal feed prices high, many of the households, unable to cope with the losses, have sold their cows.
(VNA)