Vietnam set to order commodity stockpiles as inflation soars

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Vietnamese companies will have to stockpile rice, sugar, steel, fertilizer and animal feed to ensure stable supply and stabilize prices, according to a new proposal by the Ministry of Industry and Trade.

Companies trading in the five essential products will have to set aside between 3 and 12 percent of their inventory, news website VnEconomy reported, citing the ministry's draft regulation. In returrn, they will be eligible for low-interest loans.

The Ministry of Industry and Trade will decide how much traders need to stockpile based on market conditions at particular times. The companies would also be required to sell the stockpiled goods at about 10 percent lower than market prices, set by the ministry.

Inflation climbed 17.51 percent in April from a year earlier. Food and foodstuffs prices in particular increased 24.4 percent year-on-year.

The ANZ bank said in a note on Monday that food inflation had accelerated despite increased supply. It also said the impact of Vietnam's recent monetary tightening measures will not become clear until later this year.

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