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US$ up, importers weeping
The higher dollar prices have put big difficulties on importers. A higher dollar price means higher import prices, while importers cannot raise sale prices of the imports because of the low purchasing power.
Foreign partners set higher prices
Vo Quang Uyen, Director of Quang Tam Trade and Service Company, said that the company last week imported a consignment of motorbikes and construction glass worth $100,000. Uyen said that foreign suppliers have sent new quotations, announcing price increases due to higher input material prices. However, the company dares not raise the sale prices of the imports because of competitive pressure.
Plastics products importers said that import prices have increased by $15-20/tonne over last week. Phan Thanh Huy, assistant to the General Director of Duy Tan Plastics Company, said that with the current exchange rate, the company has to limit investment plans and focus on only the most important projects.
Wholesale prices up
On June 3 in the morning, mobile phone retail centres had to wait to get Nokia brand name phones as two of Nokia’s official distributors in Vietnam, PetroSetco and FPT Nokia, halted providing products, saying they needed more time to discuss new prices. In the afternoon on the same day, PetroSetco provided products for retail agents at prices 5-8% higher than the previous levels. FPT Nokia also provided products for The Gioi Di Dong, the biggest mobile phone distributor in Vietnam, at prices 2-3% higher than the previous levels.
Dinh Anh Huan, Business Director of The Gioi Di Dong, said that the company ordered some products on June 2, but a small quantity, because it did not know if the distributor would raise prices the next day.
But retail prices remain unchanged
While import and wholesale prices both have increased, retail prices remain unchanged as retailers fear that customers will not accept the price increases.
Meanwhile, purchasing power has been decreasing as consumers have to tighten their belts in the context of high inflation.
Currently, retailers dare not keep products in large quantities. Distributors also dare not import products in big quantities because of the weak purchasing power, and because they cannot arrange enough dollars for making payment.
Cho Lon Home Appliance Centre has announced that as of June 20 the prices of imported home appliance products, including big refrigerators made by Panasonic, Hitachi, Mitsubishi, Sharp, and the prices of other consumer products, will increase by 5%. Price increases have just been introduced by the centre’s official importers.
When asked if Nokia in Vietnam knows about FPT Nokia’s and PetroSetco’s plan to raise sale prices, Nokia’s representative in Vietnam said that Nokia Vietnam would have a working session with distributors on June 4 on the price increases.
FPT Mobile, a big distributor of Samsung and Motorola brand name mobile phones in Vietnam, has worked with Samsung Vina’s representative, asking Samsung Vina to give price support to officially imported mobile models. However, Bach Diep, Deputy Director of FPT Mobile, said that it is possible that the support will be given for several models only.
As for Motorola models, Diep said that distributors will define the prices themselves. “If the exchange rate keeps firmly high at over VND17,000/US$1, we will have to adjust the prices of several models,” she said.
VNN
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