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Dairy products’ prices sky high, producers raise difficulties for farmers
The dairy material prices on the world market have been decreasing since July 2008, but dairy products keep rising in price on the domestic market.
Tien phong newspaper’s reporters have discovered that dairy product prices in Vietnam are the highest in the world.
Domestic producers now have to pay only $1,600/ton instead of $4,000/ton, as seen during the highest peak time, to import skim milk to make liquid dairy products.
With such an import price, the price of one kilogram of reverted milk should be VND 3,000-3,500/kg. However, the price of carton dairy products remains sky high.
Vinamilk and Dutch Lady, two big names that hold the biggest market shares, are retailing at VND 17,000/4 180ml-carton. Analysts have pointed out that dairy producers are earning a huge profit of 25-30%.
The analysts said that the dairy product prices in Vietnam remain overly high, with an average sale price of VND 4,250/carton, while the maximum production cost is just VND 3,000, including VND 1,000 worth of materials, VND 1,000 for packing and VND 1,000 for marketing and sales.
The import prices of whole milk, which Vietnamese companies import to sell as powder milk on the domestic market, have seen similar price decreases on the world market. In July 2008, the price climbed to $4,700/ton, but has dropped to below $2,000/ton, which is equal to the price levels in 2005. This spells that the retail prices should be only VND 100-105,000/450 gram can.
While the material prices have been decreasing on the world market, Nan and Nestle brand names have announced price increases of VND 500/450 gram can
Domestic dairy producers, though having not slashed the prices for purchasing domestic fresh milk, are trying to create difficulties for farmers.
In Phu Dong commune in Gia Lam district in Hanoi, farmers have been selling milk to Vinamilk for the last month, but the company has not signed contracts with the farmers.
Meanwhile, farmers do not know how much money they can get from milk sales as the price will still depend on the milk quality. They can get VND 7,100/kg for the best quality milk, and VND 2,800/kg for lower quality.
Farmers, who are selling milk to other companies, complain that they have only received payment for sales in November.
Meanwhile, in the document sent to the Ministry of Agriculture and Rural Development recently, Vinamilk’s General Director Mai Kieu Lien said that the company has incurred loss to purchase fresh milk from farmers in the north.
VietNamNet, Tien phong
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