Conflict pushes up retail prices
HA NOI (March 24, 2003) — Local consumers are worried about what seems to be the beginning of an upward price spiral, as the retail prices of many goods and services on the market continue to rise over the US-Iraqi crisis.
According to a local newspaper report, the retail prices of commodities such as clothing and plastics have increased between 10 and 20 per cent since the beginning of March due to the higher cost of raw materials and petrol inputs.
Phuoc Thinh and Thai Tuan textiles have risen VND3,000-5,000 per metre while Viet Tien and An Phuoc garments have increased VND5,000-10,000 per item over prices in late February.
Retailers attribute the hike to the higher prices imposed by producers and distributors as a result of the impacts of the US-Iraq war, the report said.
Transport fares have also climbed between 10 and 15 per cent over levels late last month as a result of the recent surge in petrol prices.
According to the deputy director of the Western Roadway Station, Han Thi Yen, some transport firms have asked the authorisation to lift fares as they suffer losses from the hike in oil prices.
Hai Cuong Transport has estimated its loss at about VND31,000 (excluding tolls) for every trip of a 15 seat bus. Only if fares are lifted VND4,000, to VND40,000, will the company break even, it announced.
Many producers and retailers are unable to keep up with the rise in prices because of the fierce competition on the local market. Some retailers choose to sell their goods below the new price level and forego a part of their profits, the report said.
The deputy head of the Dong Khanh Commercial Complex’s management board, Nguyen Ngoc Lam, said he sees the price increases posted by retailers as rational, since the purchasing power in most markets has fallen 5 to 10 per cent below the same period last year. — VNS
