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Commodity prices falling sharply in the world, unchanged in VN
Consumers cannot explain why input material prices have decreased sharply but producers have not slashed sale prices accordingly.
Breeders hope animal feed prices decrease. Housewives are still waiting for consumer product prices to decrease, even though producers have confirmed input material price decreases.
Prices stay in place because of big stocks
The director of a vegetable oil company said that the prices of vegetable oil in the world have been decreasing as a result of higher output and lower demand. Vegetable oil is made of soyabean and maize, but vegetable oil prices are going up and down in accordance with the crude oil price because it is also used to make biological fuel.
The milk powder price has also been decreasing sharply over the last few weeks. Imported milk powder from New Zealand is now priced at $4,700/tonne, from the US at US$3,900-4,100/tonne from the previous level of $5,200/tonne.
The milk powder price is expected to see further decreases to $3,400-3,500/tonne as Indian suppliers have returned to the market.
Meanwhile, the prices of finished products have not decreased in accordance with the input material price decreases. Analysts said that the price of material for vegetable oil has decreased by 30-40%, while finished product prices have decreased by 5-15% only. Dairy products also have not seen big price decreases, and suppliers have only been trying to promote sales of the products of low purchasing power.
According to Pham Trung Cang, Chairman of the HCM City Plastics Association, plastic material prices have decreased by 50% over Q1 2008 with PP and PE prices now staying at $1,150/tonne, down by $1,000/tonne. Meanwhile, plastic products have seen the modest decreases of 20-40%, as producers still cannot slash sale prices considerably, since they still have big stocks of materials which they imported before at high prices.
Breeders getting impatient
The prices of materials for making animal feed have reportedly decreased sharply. The price of imported soyabean grounds has dropped to VND8,800/kg from VND11,000/kg, while the prices of others materials have dropped by 15-30%.
Pham Thanh Binh, General Director of Thanh Binh Joint Stock Company, Deputy Chairman of the Vietnam Animal Feed Association, said that the sharp prices have helped feed production costs decrease by 20%. Meanwhile, feed prices have dropped by 2-5% only.
Vu Ba Quang, the owner of a pig farm in Dong Nai province, complained that the feed price decrease is lower than the maize price decrease alone. Quang said that the price of every bag of mash should decrease by VND10,000, while feed producers have only cut prices by a few thousand dong.
Explaining the modest decreases, Nguyen Minh Tri, Director of the southern branch of Cargill Vietnam, a feed supplier, said that feed producers still cannot cut prices right now as they purchased too many materials before at high prices.
Nguyen Vu Khanh, Business Director of Lai Thieu Animal Feed Company, said that the company has reduced sale prices by 7% over July, but higher decreases could not be made right now due to the big stocks.
Most recently, the Vietnam Animal Feed Association has called on its members to reduce prices in order to share difficulties with breeders.
VNN
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