Though the price of petrol and gas, plastics, and input materials, like wheat flour and vegetable oil, have been sharply decreasing, the prices of some finished products and meal services remain sky-high.
Material prices on the decrease
Statistics show that since August 2008, the price of petrol and gas, the important input materials for production, have decreased by over 40% from the highest peak, while the main materials for food have decreased by 30-50% from the beginning of the year. The price of wheat flour, for example, the main material for making cake, bread, and instant noodles, has decreased by over 30%.
The HCM City-based Binh Dong Wheat Flour said that the price decrease tendency began in August and September. The price of flour sold by the company has dropped to VND 7,500-8,500/kg from VND 12,500/kg.
Wheat bran, which is used for making cattle feed, has also seen a price decrease by VND 1,800-2,000/kg, dropping from VND 4,500-4,800/kg previously to VND 2,600-2,800/kg.
According to the Vietnam Vegetable Oil Joint Stock Company, the price of palm oil, the main material for making vegetable oil, imported from Malaysia, has stayed at $700/ton for the last month, a considerable decrease from $1,200/ton at the beginning of the year.
The price of whole milk has also been on the decrease on the world market. Since October 2008, when signs of price decreases appeared, the material milk price has decreased by 30-50% to $2,000/ton now.
Prices of finished products remain sky-high
Except home appliances, consumer electricity products and brewery, which have seen price decreases of 5-10%, and rice, fresh meat and vegetables, which have seen prices return to the levels seen before the flood, the remaining products, especially processed food, like instant noodles, confectionary and dairy products have not seen any price decreases at all.
Restaurants, both luxury and popular for common people, are still keeping high prices. People still have to pay VND 15,000 for a popular meal, and VND 20-30,000 for a higher-grade meal.
Right after the petrol price was raised in July 2008, the retail price of a La Vie 19-litre bottle of water was raised to VND 40,000 from VND 36,000. However, the price of the product has not decreased, though the petrol price has been lowered several times.
Vinamilk, reasoning the higher price of fresh material milk, has raised the liquid dairy products by 5-10% since the beginning of December. Hai Ha – Kotobuki confectionary producer has also raised the prices of a series of products by 10-20%.
Unfair to consumers
In a talk with VietNamNet’s reporters, many companies, though admitting the input material price decreases, still said that they would not consider lowering sale prices right now for fear that the consumption will not increase immediately. If slashing the sale prices, producers will have to face decreases in turnover.
An instant noodle producer told VietNamNet that it does not think it is necessary to slash sale prices, adding that the time of having cheap food is over.
In the context of the economic fever, the lower purchasing power proves to be the biggest concern of governments around the world, including Vietnam. The Government of Vietnam has been taking drastic measures to stimulate demand. However, the measures will have no significance if producers themselves do not join forces to stimulate the demand by slashing their products’ prices.
Nguyen Nga
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