Gasoline prices drop but goods still don’t go down

, Gasoline prices drop but goods still don’t go down

A few days after the price of gasoline dropped by 3,000 VND per liter, many items still kept their prices and even increased

Mr. Hanh’s pho shop (Van Phu urban area, Ha Dong, Hanoi) has not yet adjusted its selling price. Currently, each bowl of pho ranges from 40,000-60,000 VND, an increase of 5,000-10,000 VND compared to June. Similarly, each portion of chicken rice also increases to 55,000-70,000 VND. This price was adjusted by Mr. Hanh from the end of June to cope with the “price storm” of fuel.

“Food, especially fresh chicken, still has to be imported at the old price of 110,000-120,000 VND per kilogram, so I can’t calculate the selling price yet,” explained Mr. Hanh, the owner of this pho restaurant.

Goods have not yet decreased according to the price of gasoline - Photo 1.Goods have not yet decreased according to the price of gasoline - Photo 1.

A bowl of pho is 40,000 VND, an increase of 5,000 VND compared to before in Ha Dong (Hanoi).Photo: Anh Minh

Similarly, in Ho Chi Minh City, shops selling vermicelli, banh chung, and beef vermicelli have increased their prices by 5,000-10,000 VND compared to the beginning of the year, also waiting for the next adjustment of gasoline prices to consider.

Petrol prices are adjusted every 10 days and only decreased by about 10% after 7 consecutive price increases, so food and beverage businesses like Mr. Hanh’s shop still have to “listen to the situation, the price of course – If raw materials decrease further, then think about adjusting the selling price”.

Fresh food items, green vegetables… at the people’s market are still at the same price. Ms. Hoa, a small vegetable seller at Binh Thanh market (HCMC), said that it is difficult to adjust the price of green vegetables when the supply is limited. “This whole week has been raining and stormy, many kinds of green vegetables are short of goods, causing prices to skyrocket,” Ms. Hoa said.

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Currently, each kg of lettuce is up to 60,000 VND per kg, spinach is 50,000 VND, tomatoes and onions are still at 30,000-50,000 VND per kg.

Goods have not yet decreased according to the price of gasoline - Photo 2.Goods have not yet decreased according to the price of gasoline - Photo 2.

People buy vegetables at a market in Phuoc Long B ward, Thu Duc city.Photo: Quynh Tran

Some items have even increased in price. According to Mr. Hoa, the owner of a pork stall on Pham Van Chieu Street (Go Vap), when the price of pork increased by 12, he only dared to increase the price by 2-4, so the current level cannot be reduced further.

“I am worried that the price of live hog will continue to increase in the next few days, so the retail price of pork will be difficult to reduce. On the other hand, the cost of producing a kilogram of live hog continues to increase when the price of animal feed ‘teams’ 4- 6 times in the first half of the year,” said Mr. Hoa.

Ms. Nguyen, a small trader selling pork at Ha Dong market (Hanoi), also said that the price of live pigs has skyrocketed to 70,000 VND per kilogram, so the price of pork she imported has increased day by day. Currently, each kilogram of pork is more expensive by 10,000-12,000 VND per kilogram compared to half a month ago.

“The weather is erratic and rainy, the purchasing power is weak while the import prices skyrocket, any market that breaks even is lucky, and most of them have to make up for their losses,” she confided.

Currently, each kg of pork tenderloin at local markets ranges from 120,000-130,000 VND; Bacon is only 130,000 VND, pork ribs 120,000 VND… Compared to two weeks ago, each price has increased by about 10,000 VND.

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With the group of imported goods, the price cannot be reduced with gasoline. Specifically, imported Similac milk cartons for 1-year-old babies cost up to over 700,000 VND, nutritious cereals are still over 350,000 VND per kg, Canadian flour 90,000 VND per kg…

Explaining the reason, according to importers, it takes at least a month for imported goods to reach consumers. Therefore, if the price of gasoline drops only for 10 days and rises again soon after, the freight and other costs will remain the same. In addition, the shortage of empty containers pushes up transportation costs. Each container of frozen goods used to cost only 4-8 million VND, now it is 20-30 million VND.

On the other hand, the composition of imported goods is influenced by the international market, so only when the world price of raw materials falls, can domestic imports decrease. Currently, the price of input materials of cereals, milk, sugar, and palm oil is increasing by 40-60% compared to the first 6 months of 2021.

Similarly, according to Mr. Hoang, a food trader in Hoc Mon wholesale market, the reason why fresh food and green vegetables are difficult to reduce is that transportation costs account for about 20% of the cost. Lower gasoline prices also only partially support businesses. Meanwhile, other costs such as labor, slaughter, delivery, and input products are still high and have not stopped.

“In the past 2 weeks, the price of piglets has increased by 10, not to mention that when imported, I also incurred care costs when they were lying around waiting to be released from the barn every day, 50,000 VND a day,” said Mr. Hoang.

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Goods have not yet decreased according to the price of gasoline - Photo 3.Goods have not yet decreased according to the price of gasoline - Photo 3.

Pork prices in HCMC markets are still high despite a decrease of 3,000 VND per liter in gasoline.Photo: Quynh Tran

Sharing the same view, Mr. Truong Chi Thien – General Director of Vinh Thanh Dat Food Company said that the cooling of gasoline is a positive signal to slow down the increase in commodity prices in the market. But the price will be difficult to reduce because each product includes many costs. Particularly for eggs, the cost of transportation only accounts for about 15-20%, while other costs such as animal feed, packaging, labor, labels… increased by 20-40% compared to that of eggs. same period last year. On July 11, egg prices continued to increase due to limited supply and adjusted feed costs.

“Currently, the stable egg price at the company is still 10-15% lower than the market price. In order to reduce egg prices, input costs such as packaging, labels, and animal feed must go down,” said Mr. Thien.

According to Assoc. Dr. Dinh Trong Thinh, Lecturer at the Academy of Finance, the reduction of gasoline prices will help reduce the cost burden, spending on fuel of businesses and people. However, a drop in commodity prices immediately after the adjustment of petroleum is unlikely because there is often a delay.

He analyzed, after the reduction, the price of gasoline remained at a relatively high level – 30,000 VND per liter. That is, the recent price reduction, the impact was not deep enough for manufacturers and retailers providing goods and services to immediately adjust the selling price.

“Manufacturers still need to keep an eye on the trend of fuel prices coming here to stay stable or increase again before making a decision to adjust. At least the current price level will remain the same until the petrol price management period. the next oil. If gasoline continues to go down, the price reduction can be calculated,” he commented.

Source: CafeF

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