Milk prices in Vietnam will surge between 12 and 17 percent on average this year on a recovering global economy and a shortage in supply, research firm Agromonitor has said in a report.
The Hanoi-based company said all food products will become more expensive this year as consumers no longer have to tighten their belt, driving up demand.
Higher production costs and a weakening dong against the dollar will also contribute to milk price hikes this year, Agromonitor said.
Many dairy producers have already raised retail prices by up to 18 percent since mid-February following a devaluation of the dong last month.
The central bank lowered the daily reference rate for the dong 3.3 percent on February 11.
Most milk products in Vietnam have to be imported. According to the Ministry of Agriculture and Rural Development, although the domestic fresh milk output is expected to increase by 25-30 percent this year, it can only meet 24-27 percent of local demand.
The Ministry of Finance said it will issue a new decree this month to tighten control over prices of several consumer goods, including milk products. Under the decree, dairy firms may have to register prices with the authorities and restrict their advertising expenditure to under 10 percent of their revenue.