New Year, new prices: A Vietnam tradition

(c)Chuck Kuhn Photo

HANOI, Feb 11 (AFP) - Prices of groceries and other essentials have risen ahead of the Lunar New Year in Vietnam but consumers say that is a small price to pay to please their ancestors.

Shoppers say they have come to accept inflation during the New Year period, known locally as Tet, the most important festival of the year in Vietnam.

"Prices of all products have always gone higher prior to Tet," said Nguyen Thi Hien, 61, a Hanoi housewife who had just bought leaves to make "banh chung", a sticky rice cake filled with bean paste and meat. It is traditionally offered to ancestors during Tet, which begins on Sunday.

Family feasting is also part of the annual tradition.

"It's the time for us to spend money. We have to buy the best things for the ancestors, and for family members," Hien said.

A butcher, who gave her name only as Mai, said the price of meat had gone up by about 10 percent and business had been pretty good.

"It's Tet, so prices of everything increase," she said.

Hoang Mai Hoa, 27, an office worker and mother of a four-year-old daughter, said all essential goods are about 10 percent more costly.

"Many people go shopping and goods are always sold out," she said, adding that although prices are higher, people seem ready to spend.

"For me, Tet is the most important event of the year. Within my financial capacity, I am ready to buy the best food for my family."

State media said prices have jumped even though there seems to be an adequate supply of essential goods.

While there has been no official evidence of massive shortages, "shops and vendors continually take advantage of the high demand", the state Vietnam News wrote in an editorial on Wednesday.

Companies had stockpiled enough goods to meet demand, the newspaper quoted Deputy Minister of Industry and Trade, Nguyen Cam Tu, as saying.

Overall demand for goods had risen by 10 percent against a year ago, Tu said in the report.

Vietnam's economy rebounded from the global financial crisis and grew 5.32 percent last year but observers have expressed concern about a return to high inflation, which reached an annual 23 percent in 2008.

Consumer prices rose 6.88 percent in 2009, and were up 7.62 percent year-on-year in January, official figures showed.

While meat and other goods have become more expensive before Tet, clothes-seller Nguyen Van Anh said she has had to discount her stock because of unseasonably warm weather.

"The business this year is pretty bad. We have prepared, as usual, all the warm clothes for a cold Tet," Anh said.

But with recent summer-like temperatures, which residents say have been about 10 degrees Celsius (50 Fahrenheit) above normal, no one has been buying.

"I could not sell anything over the past two weeks," she said. (By Tran Thi Minh Ha/ AFP)

Products’ and meal services remain sky-high despite material price falls

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

Soaring inflation hits poor hardest

Continuing high inflation in Viet Nam has hit the most vulnerable people in society hard. To make matters worse, inflationary pressure is threatening to disrupt the Government’s plans on reducing the poverty rate, and as prices soar those who have managed to rise out of poverty are in danger of falling back under.
This month issue of our new magazine Outlook examines how the poor, students, low-income earners and farmers are struggling to cope with inflation – and what is being done to help them.
We report on the many people across the nation who are feeling the strain of rising prices and we find out why life isn’t getting any easier for farmers, who are supposed to be benefiting from higher prices for their produce.
Other stories on the plight of the poor in times of high inflation also include an interview with the Deputy Minister of Labour, Invalids and Social Affairs, Le Bach Hong, who says while soaring inflation may prevent this year’s poverty reduction targets being met, there’s a good chance the nation will still reach its goal of reducing the poverty rate to between 10 to 11 per cent by 2010.
Outlook, which goes on sale in Ha Noi, HCM City and other major centres this morning, also visits a village renowned for making hand fans, heads to the box office to check out the state of the Vietnamese film industry – and finds out how art lovers can impress friends with their very own Mona Lisa.
Outlook’s regular news round-up summarises major news developments around the country and the rest of the world. Readers can also catch up on what’s hot and what’s not in the country’s culinary and art scenes – and check out regular listings for everything from bars to embassies.
Outlook retails for VND15,000 at news-stands, major hotels and restaurants and at the head office of the Viet Nam News at 11 Tran Hung Dao, Ha Noi, or our HCM City office at 120 Nguyen Thi Minh Khai Street