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Paper prices to rise?
The Vietnam Paper Association (VPA) has asked the Ministry of Industry and Trade to raise the import taxes on paper imports in order to help local producers get rid of their big stocks. Imported products are now cheaper than domestic products.
If the proposal is approved, the domestic paper price will increase, burdening domestic consumers.
Foreign-made product prices keep rising
Most stationery shops in HCM City say that the price of A4 size photocopy paper has increased by VND1,000/gr in the past week. T, a saleswoman at MC shop on Nguyen Thi Minh Khai street, said that Double A paper last week was sold at VND60,000/gr, but is now selling at VND62,000/gr, while the price of IK plus has increased from VND56,000 to VND58,000/gr.
The director of a company specialising in importing paper from Indonesia and Thailand has confirmed that paper prices have moved up slightly since early March after many months of decreasing.
Most importers have chosen to import products from the two countries to enjoy the 0% tax rate. The prices of paper for photocopying and book printing have increased by $100/tonne over the beginning of 2009 to $770-780/tonne for deliveries in June. Some other kinds of paper have increased by $50-70/tonne.
C, another paper importer, said that due to the economic recession, many paper producers in Indonesia and Thailand had cut output, leading to the supply decrease.
Local producers seeking tax increases
While foreign-made paper is increasing in price, domestic paper producers have proposed raising the import tax from 0% to 5% for printing and writing paper, and from 3% to 5% for newsprint sourced from ASEAN countries.
However, the proposal has not been applauded by paper distributors. “If the proposal is accepted, consumers will suffer. Paper materials make up 80-85% of the production cost of every notebook. If we keep the same sale prices, we will suffer,” said Nguyen Minh Trung, Marketing Director of Vinh Tien Paper Joint-stock Company, specialising in making notebooks.
Nguyen Duc Binh, Director of the Van Nghe Publishing House, has warned that if the proposal is accepted, book sale prices will increase by 5%.
Why raise taxes?
A high-ranking officer of Tan Mai Paper Company has confirmed that the company’s sales in Q1 decreased by 40% over the same period of last year. Though the company has slashed sale prices by VND0.5-1mil/tonne, it could sell only 21,000 tonnes in Q1.
Currently, Tan Mai is offering to sell printing paper at VND15.1-15.4mil/tonne, and newsprint at VND14.2mil, not including VAT.
Trung from Vinh Tien said that imports are being offered at VND15.2mil/tonne, including VAT, which means domestic products are some VND1.5mil/tonne more than import products. Meanwhile, some newspapers have received quotations on import newsprint from Indonesia at VND14mil/tonne, or VND900,000/tonne lower than domestic newsprint.
It is clear that local paper manufacturers are seeking protection for local production, as the unsold paper volume of local producers, according to Vu Ngoc Bal, VPA secretary general, had reached 70,000 tonnes by mid April.
vietnamnet, tt
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