Vietnamese customers to suffer price hikes

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A motor driver in Hanoi in waiting for passengers. Like other local labors, the free driver is suffering price hike.

Ho Chi Minh City supermarkets say suppliers are jacking up prices and won't stand to reason.

Thousands of products at Maximart including foods, drink, sweets, cosmetics, detergents, home appliances, and garment and plastic items will soon sell for 10 percent more than they now do, the supermarket chain has announced.

Nguyen Anh Hong, executive officer of the chain, said suppliers' price hikes were to blame. She also claimed that suppliers were blaming the increases on the surging price of power, petrol and materials, along with an unstable exchange rate.

Citimart, which plans to add 5- 15 percent to its prices, reported the same situation.

Saigon Co.op, which is offering a discount up to 46 percent on 300 products until April 18, has received notices from more than 60 suppliers who say they will increase the prices of some 100 items by 7-10 percent.

Le Quang Thuc Quynh, marketing director of Saigon Co.op, said the chain was "considering if the requests are reasonable."

Quynh said the supermarket was working with each supplier to make them justify their requests and then decide together on the size and timing of the increases.

Duong Thi Quynh Trang, a director of supermarket chain Big C, said her company was trying to negotiate with electronics suppliers who have suggested a price increase of between 8-20 percent.

Many goods such as formula milk, power and steel already became 5-10 percent more expensive last month.

Saigon Co.op said it will develop a goods supply of its own by signing special contracts with producers to make Co.op-brand products, in order to be less dependent on suppliers, and to save money from sale activities for use in special offers and promotions.

Steel, cement rise

Vietnam Steel Corporation increased steel prices for the second time in two weeks last Friday as producers continue to complain of material price hikes.

The newest increase of VND500,000 (US$26) a ton brings the price for a ton of roll steel to VND13.77 million while the new price for a ton of bar steel is VND13.87 million. The corporation had last raised prices on March 23.

Do Duy Thai, general director of Pomina, which produces steel in the southern province of Binh Duong, said the prices of steel billet and scrap iron have climbed 50 percent to $630 and $400 a ton, respectively, since February.

Iron ore now sells for twice the amount it did in December of last year.

Nguyen Tien Nghi, vice chairman of Vietnam Steel Association, said steel producers are also suffering from the increasing prices of power, petrol, together with higher loan interests.

Many construction material stores anticipated the new prices and had raised their steel prices a week earlier, to around VND15.2- 15.7 million a ton.

Meanwhile, cement producers have cut their discount to distributors, and since Thursday last week, cement has been delivered for a further VND1,000- 2,000 per 50 kilograms.

HCMC plans to stabilize prices

HCMC Department of Industry and Trade said last week it would send market managers to check prices on the market.

Businesses found raising prices unreasonably would be punished, and some may have their licenses revoked, the department said.

The city People's Committee has asked the department for help with stabilizing prices by supporting the creation of a long-term goods supply. In response, the department has launched what it calls "The Strategic Project to Create Supply and Stabilize the HCMC Market until 2015."

Businesses participating in the project will receive funding and financial incentives such as zero-interest loans from the city, the committee said.

The project will need to at least stabilize the prices of rice, sugar, cooking oil, meat, processed foods, eggs, milk, fruit and vegetables.

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