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Consumers thunderstruck by price increases of imports
Though expecting commodity price increases after June 30, consumers are still shocked by the unimaginably high price increases of imported products.
A customer who went to NTA Shop, specialising in imported drinks and confections, on Lang Ha street in Hanoi, to buy the German Frischli brand name dairy product, could not believe his ears when the shop owner said the sale price.
The customer said that two weeks ago, he bought 10 boxes (1 litre/box) at VND26,000/unit, while now he has to pay VND30,500/unit. The shop’s owner said that prices increase every day, and that it is difficult to sell products nowadays due to the overly high prices.
As the price increased by 20%, the customer bought four boxes instead of 10. He regretted not having bought 30 boxes two weeks earlier.
Other kinds of food like confections, cheese, nutrition powder, wine, coffee and fruit juice, imported from Asian and European countries, all have been increasing by 10% in price at least, or 15-20%, while some products have increased by 30-50%.
A representative of Citimart said that the supermart has been notified by food suppliers to raise prices by 10-20% on average, while products with big brand names will see bigger increases.
He said that the prices of several items at Citimart chain remain unchanged as Citimart has been trying to negotiate with suppliers to delay price increases. Moreover, the supermart is still selling products it imported before, when prices were lower.
The prices of non-food imported commodities like home appliances have also escalated.
Electric cookers, pans, liquidisers and irons imported from China, South Korea, Thailand, the US and France all have seen price increases of VND100,000/product.
Oanh, the owner of a household appliance shop on Giang Vo street, said that price increases have never been as big as now.
Oanh said that Chinese and Thai electric cookers, sold at VND600,000/unit previously, now are selling at VND700,000, while products previously priced at VND1.3mil are now VND1.5mil.
She complained that the sharp price increases have been keeping customers away. In previous years, electric pans and liquidisers sold very well in the summer but now are selling very slowly.
Trang, the owner of NTA Food Shop, also said that previously, for VND100,000, customers could buy five items, while they now can buy three items with the same sum of money. Therefore, customers always think carefully before deciding to purchase.
Minh Anh, Tieng Vang and Huong Thuy Companies, three big food importers and distributors, said that there are three main reasons for the sharp price increases.
First, the euro’s appreciation and the VND/US$ exchange rate fluctuations. The euro price increased by 30% compared to the end of 2007 (VND23,000/Euro vs VND28-29,000/Euro). Meanwhile, the dollar price soared sharply by 20%.
Second, the import price increases set by importers. Expensive input materials and high inflation are common problems in the world. To date, 20 trademarks have announced price increases.
Third, increased transportation fees. In December 2007, enterprises spent $1,950 to have a 20-foot container of frozen products brought to Vietnam, while the fee has risen to $3,200-3,300.
Importers all say that they are accepting profit decreases in order to retain clients. For example previously, a company gained the profit of 20%, but now it pockets 15% only.
VNN
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