3:26:25 PM | 7/8/2005
2004 CPI Expected to Lower than Two-digit Figure
The Domestic Market Regulation Working Group of the Ministry of Trade has predicted that the consumer price index (CPI) for this year would be lower than a two-digit figure. According to a source from the Ministry of Trade, the balance between supply and demand in the Vietnamese market has been maintained with various goods. Some goods are even expected to see a drop in their prices thanks to tariff cuts. This has made the market heat up. Some goods which have been impacted by the world price may see a price increase. However, guidelines provided by the Government, ministries and agencies have been implemented to stabilise the prices in the market. As a result, after a long time increase, prices of goods, especially necessities such as rice, food, fruit and vegetables, construction steel and electronic goods have tended to fall. Prices of fertiliser continue to rise in some localities.Price forecast for some necessities
According to the Ministry of Trade, rice prices in the north will see a gradual fall, but it may only be slight as farmers will store the autumn-winter rice, which has high quality and a long consumption period.
Meanwhile, rice prices in the Mekong delta will increase slightly because rice exporters continue to implement their signed contracts while farmers sell very little after the flood season. According to reports from the Food Association, since early this year, Vietnamese enterprises have signed contracts to export 3.9 million tonnes of rice. Rice export volume is expected to reach between 200,000 and 250,000 tonnes in November.
Prices of fresh food, vegetables and fruit are predicted to be stable with a slight fall. The total output of refined sugar for the 2004-2005 crop may reach 1.27 million tonnes, up by four per cent against the previous crop. This output can meet the domestic demand. The price in November will likely see a drop of between VND100 and 200 per kilogram for new supplies. However, there will be no sharp falls as prices of sugarcane remain high.
According to the Ministry of Agriculture and Rural Development, retail prices of urea fertiliser have increased by VND50 and 100 per kilogram in November as the demand for it may increase. To stabilise and ensure the interests of farmers, apart from measures to make sure that supplies are available and to examine activities of agents and shops, the Ministry of Trade has proposed not to collect value added tax from fertiliser importers.
At the same time, the domestic oil and petrol market is still stable in both supplies and prices. Enterprises despite many difficulties due to losses continue to maintain their import activities to meet the domestic consumption. The Ministry of Trade estimates that prices of steel in November will continue to be stable and will not fall as prices of steel ingots still remain at US$400 per tonne. Prices of cement and paper will continue to be stable.
As forecast, prices of locally made medicines in late 2004 will be likely to increase due to a rise in input costs (prices of oil and petrol and food). Prices of imported medicines will continue to be stable, except some specific medicines, whose prices may increase.
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