While most manufacturing companies have resumed operations as restrictions related to the pandemic have been relaxed, significant challenges remain due to the rising cost of oil and raw materials. As a result, the price of consumer goods is expected to rise sharply.
Duyen Hai Economic Development Co (Cofidec) director Dang Thi Phuong Ninh told local media: and is expected to increase even more.
Ninh said the prices of raw materials and accessories have increased since the start of this year and are expected to continue to rise.
According to experts, the rising cost of oil and raw materials will put great pressure on consumer spending and a heavy burden on businesses, especially against the backdrop of the resumption of production after a long period of social distancing.
Ninh said the company is having difficulty hiring more workers to meet demand, adding that “the high cost of accessories is now the biggest concern.”
As the director of Vnflour Co, a company that produces and supplies flour for brands such as Vifon, Thien Huong Food and CP Food, Nguyen Tran Ngoc Trinh said the increase in oil and raw material prices was affecting production considerably since pandemic restrictions were relaxed.
Trinh said, âThe price of wheat has increased by 30-40%, sometimes even up to 50%, compared to before, so we are forced to change the price of raw materials supplied to food companies. “
Trinh is concerned that the sharp rise in commodity prices will affect product prices in the near future.
CJ Food Vietnam’s human resources director Nguyen Thi Thao Vien said the company faces the same problem of rising prices, but will try to keep prices stable to share the difficulties with consumers. She said, âWe cannot increase selling prices in the context of falling people’s incomes. “
Pham Thi Huan, General Manager of Ba Huan Co, the largest egg supplier in Vietnam, said, âCurrently, as input costs increase by 20-30%, purchasing power is low because schools have not yet opened and businesses in industrial areas have not yet regained full activity.
Although the egg company has not yet increased the prices, Huan said, “We hope that the purchasing power will increase so that we can keep the prices unchanged, but if the demand is too low in such a situation, we will have to raise prices. “
The agro-food industry is not the only one to experience an increase in the prices of raw materials; steel, wood and other businesses are suffering in the same way. Nguyen Chanh Phuong, vice president and general secretary of the Ho Chi Minh City Fine Arts and Woodworking Association, said most materials have seen their prices rise.
He said, âThe price of paint products has increased rapidly due to the influence of gasoline and oil prices. From October to November, they increased each week by five percent.
He added that companies have to adjust prices, but this is not always easy as they have agreed fixed prices with customers.
Phuong said, âSince there are a lot of orders to be completed, companies are concerned about the high production costs. Others fear taking new orders because of the cost.
Phuong said companies should renegotiate prices with their customers and seek cheaper suppliers to reduce costs.
The price of essential items has increased by 10-30%, and the prices of catering services have also increased by 10-15%.
Depending on market prices, a one-liter bottle of cooking oil has increased from 3,000 to 5,000 dong ($ 0.13 to $ 0.22), a 15% increase over the prices displayed in may. Vegetables, fruits and fresh foods also increased three to four times compared to July.
A representative of Aeon Vietnam said the price increase would affect small retailers and markets first. Large supermarkets, with advanced contracts, can better control prices.
The Vietnamese Institute for Economic and Policy Research predicts that inflationary pressure will increase in the last months of the year due to the sharp increase in producer prices, adding that this pressure will gradually transfer to consumer prices.
All over the world, inflation rates have skyrocketed, according to Bloomberg. The media reported that consumer prices in the United States had increased at their fastest pace since 1990. The Chinese and Japanese producer price indexes performed better than expected and Germany, as fourth. global economy, was no exception.
VIET NAM / ASIA NEWS NETWORK