Inflation poised to take off

Shoppers at a Hapro minimart in Ha Noi. Despite predictions of price increases in the lead-up to lunar new year, the Ha Noi Trade Co has committed to maintain current prices on essential goods through the end of the year. — VNA/VNS Photo Tran Viet

HA NOI — The prices of essential goods such as rice, sugar, meat and cooking oil are predicted to increase in the weeks running up to the Tet (lunar New Year) holiday.

The Ministry of Agriculture and Rural Development's Department for Planting and Breeding had estimated that the domestic market would be short of 40,000 tonnes of pork, causing the price to rise by 5-7 per cent from the current average level of VND80,000/kg, said Ha Noi Supermarkets' Association chairman Vu Vinh Phu.

Bird flu had also re-emerged in the northern province of Nam Dinh and could cause a scarcity of poultry if the outbreak became more widespread. Even without this impact, prices were expected to rise seasonally by 5-10 per cent, Phu said.

Ba Huan Co Ltd director Pham Thi Huan affirmed that, due to a surge in input costs and the fact that more farms were raising chickens for meat rather than eggs, the price of eggs would also increase by VND250 per egg.

Sugar enterprises were stockpiling 36,000 tonnes of sugar, 10,000 tonnes more than last year, and were importing an additional 90,000 tonnes this year to ensure no shortages, with any price increases likely to remain below 2 per cent, said the deputy head of the ministry's Department of Agro-Forestry and Aquatic Product Processing and Salt Making, Tran Thi Mieng.

The most worrying factor in the expected price hikes was the psychology of buyers and sellers, commented Ha Noi Department of Industry and Trade deputy director Nguyen Van Dong.

As Tet approached,vendors sought to make higher profits while consumers wanted to stock up on sufficient foods for the holidays, leading to the price increase, Dong said, adding that his department had requested enterprises account for any planned price increases.

So far this year, nine localities nationwide have applied price stabilisation programmes. Ha Noi has spent VND500 billion (US$25 million) and HCM City VND380 billion ($190 million) implementing these programmes.

Meanwhile, Deputy Minister of Industry and Trade Ho Thi Kim Thoa said petrol reserves remained sufficient to satisfy domestic demand through the holiday.

The ministry has asked Petrolimex, the nation's leading petrol distributor, to stockpile sufficient supplies. Other enterprises were required to reserve their products in line with regulations, she said, so no shortage of oil or petrol would occur.

Domestic petrol distributors were also required to maintain price levels until Tet, she added, and the State Bank of Viet Nam had been tasked with satifsying the demand of importers for foreign currency to ensure supplies.

Petrolimex deputy director Nguyen Quang Kien said that the nation would import $800 million worth of oil and petrol between now and the end of the year. — VNS