Thailand
Vietnam: Market prices stay high despite sharp falls in petrol prices
The nation has seen food prices remain stubbornly high despite the recent sharp decline in gasoline prices.
Petrol prices were adjusted down as of 3 p.m. on August 1 by the Ministry of Industry and Trade and the Ministry Finance, marking the fourth drop in a row and the third significant price decrease. RON 95 for instance plummeted from nearly VND33,000/litre in late June to more than VND25,000/litre.
Nguyen Binh Phuong, deputy director of Thu Duc Agricultural Wholesale Market Management and Trading Company, said that the current prices of fruit and vegetables have remained unchanged since the beginning of July when food prices were adjusted following a record increase in retail petrol and oil prices.
Phuong pointed out that agricultural products are highly dependent on both the weather and cultivation costs, while transportation costs only make up a very small part.
Meanwhile, according to some transportation firms operating on the Da Lat – Ho Chi Minh City route, fuel prices going up means that they have to spend a long time negotiating in order to increase the freight rate. As a result of this change they have no plans to reduce transportation costs as soon as petrol prices are lowered.
Nguyen Ngoc Thang, operation director of Co.opmart, shared that the subsequent declines in petrol prices over the past month have helped distributors to restrain any increases in commodity prices.
However, he added that for businesses that have to import and store raw materials several months ago, it is now difficult for them to reduce prices immediately following the recent petrol price reduction.
Thang went on to say that as soon as the Prime Minister sent a dispatch requesting actions to be taken to control commodity prices, his company asked suppliers to recalculate the cost in order to get more suitable prices.
According to Truong Tien Dung, vice chairman of Ho Chi Minh City’s Food and Foodstuff Association, commodity prices in the market are not only dependent on petrol prices, but also on many other factors such as the price of input materials and packaging costs.
Recent times has seen businesses accept their inefficient operations in order to maintain production. Dung therefore believed that despite a sharp drop in petrol and oil prices, it is not enough to allow commodity prices to achieve equilibrium.
“It also needs the decrease of other input price factors,” he concluded.
Source: VOV