With the information that prices of electricity, coal, petroleum products, etc will likely be hiked in Vietnam, sellers of many products and services have decided to raise their prices.
The Government of Vietnam recently approved the plan to raise the price of electricity by 18 % from March this year.
Most recently, on February 11, the State Bank of Vietnam announced its decision to raise the interbank exchange rate of US dollar against the local dong from 18,932 to 20,693 (or 9.3 %) and narrow the exchange band at commercial banks from +/-3 % to +/-1 %.
In addition, State-owned petroleum traders are complaining that they cannot bear a loss of over VND2,000 per litre sold any longer, as they are not allowed to adjust prices for long. Prices of other inputs like coal are also climbing.
Many companies have decided to make segmented increases to avoid “price shocks” on the market.
From early February, cement producers hiked their selling prices by VND60,000 per tonne to offset rising input costs. Accordingly, cement is now commonly sold at VND900,000 - 1.36 million per tonne, depending on type and region.
Nguyen Van Diep, Chief of the Office of the Vietnam Cement Association, said the price rise of only 5-6 % is not enough.
Justifying the price increase, he said costs of transportation, packaging and inputs started to climb. If cement companies did not take action from now, the rise would be greater when prices of coal and electricity are lifted.
Steel price also gained by VND300,000 - 800,000 per tonne as ingot prices soared to US$670-690 per tonne from US$600 in December 2010. Scrap steel prices also went up from US$400 per tonne to US$530 - 540. Presently, construction steel is being sold at VND15.5 - 16.4 million per tonne, excluding VAT.
Mr Nguyen Tien Nghi, Vice Chairman of the Vietnam Steel Association (VSA), said the steel price is driven by global markets, coupled with domestic coal and electricity prices. The final increase in price will depend on many factors, particularly the acceptance of customers. If the rise is too much, domestic steelmakers may be unable to complete with foreign steel firms flooding into our country.
Most responsive to devaluation of the local dong is liquefied petroleum gas. Only one day after the devaluation by the State Bank, retail gas prices increased VND15,000 -17,000 for a 12 kg canister to VND320,000-325,000.
Although prices of other consumer goods have not been hiked in Hanoi, the capital of Vietnam, the change is just the matter of time, said Ms Mai Khue Anh, Managing Director of Hanoi Trading Corporation.
"Although selling prices in supermarkets usually increase later than in traditional markets, the upcoming rise will be significant,” said Mr Vu Vinh Phu, Chairman of the Ha Noi Supermarket Association.
Vietnamese
