Vietnam has seen prices of gasoline, food, steel and plastic products soaring in recent times, and the problem has put producers in tenterhook and hit consumers dearly.
Increasing steel, gasoline prices
World steel ingots were quoted early this week at US$500 per ton. As local importers have secured futures contracts, the price for imported ingots is now hovering in the range of US$450-460 per ton, which is still twice the figure of US$230 in early 2003, according to the Vietnam Steel Association.
Increasing steel prices have affected the domestic steel market, said Pham Chi Cuong, vice chairman of the association. Currently, construction steel sells for VND8.2 million to VND9.2 million per ton, or an increase of VND3.9 million to VND4.5 million compared with the same period of last year. The steel price in the northern market is some VND1 million higher than in the south as inventories there are smaller.
Steel manufacturers have forecast steel prices to stay high in the coming time, as it is reported that the Chinese market has this year become a black hole consuming large quantities of steel.
The rocketing price of steel products sends waves of tremor to contractors, especially those who have signed building contracts in advance while the steel price was still low.
Nguyen Van Chinh, a contractor of small building projects in HCMC, said construction projects which he signed before Tet have turned out to be unprofitable or even money-losing.
Meanwhile, steel manufacturers have not been affected by the price hikes, and some have even gained big profit from the price movement, Cuong of the association said.
"Steel manufacturers have raised their selling prices in line with the global trend. Those with big stock have even earned a great profit," Cuong explained.
Rising prices of gasoline and other oil products have affected producers and consumers. As from February 22, prices of gasoline and other oil products are up 6-7%.
Transport companies are said to suffer most as gasoline spending accounts for 35% of their operation cost.
The carriers will fall into immediate difficulty as they cannot revise up their service charge right after the gasoline price hike.
Plastic exporters run into trouble
The soaring price of plastic materials is a headache for local producers. Although the price of plastic materials eased last week, it is still now 50% higher than that in the year-ago period. Local plastic producers are facing difficulties with export contracts as they have to import more than 80% of the input materials.
By early February, the plastic grain price had seen an average increase of US$40-60 per ton over that in end-January.
Cho Lon Plastic Co. had signed export contracts before the price hike, and therefore has expected big losses, said Vo Van Duc Bay, deputy sales manager. However, the company has not raised selling prices for fear of losing clients to companies in China and Indonesia. The company expects the price of plastic materials to decrease in the next one or two months.
On the domestic market, plastic product prices have increased by 10% to 20%, a far slower pace than that of the material price increase. Companies said domestic demand was not high and therefore the market would get frozen if they increased selling prices further.
Bird flu triggers food price rise
Although the shopping-spree Tet holidays have passed for one month, the food market has shown no signs of easing. At wholesale markets in HCMC, prices of shrimp, fish, cuttlefish and vegetables are still standing high. One of the main causes is the impact of the bird flu epidemic in poultry. Most restaurants have replaced chicken dishes with seafood.
Beef prices are now in the range of VND80,000-100,000 a kilo or an increase of 20-30% compared with that ahead of Tet. Pork sells for some VND50,000 a kilo, up VND15,000 on the rate before Tet.
Similarly, shrimp price has almost doubled to VND 190,000-220,000 a kilo of white shrimp compared with the VND 100,000 mark before Tet. Cuttlefish price also leaped by the same rate, amounting to VND50,000-60,000 a kilo now.