VietNam Business

Tuesday, February 15, 2011

Milk prices increased 16 times in three years

Milk prices increased 16 times in three years Milk prices in Vietnam have been adjusted upward 16 times over the past three years, causing difficulties for a lot of consumers, news website VietNamNet reported Sunday.

It quoted the Vietnam Chamber of Commerce and Industry (VCCI) as saying dairy companies had hiked their prices by 3-10 percent every two to three months.

Regular reasons cited by dairy firms included new package designs, higher input costs and increases in foreign exchange rates.

Milk prices have been raised by 4-10 percent this year by major brands including Abbott, Mead Johnson, Friesland Campina Vietnam, XO, Dumex, Meiji, VCCI said.

According to a recent report by the Vietnam Competition Administration Department, up to 80 percent of milk powder products in Vietnam are imported.

This means the local milk market is closely connected to the world market, but the problem is that domestic prices have continued to surge irrespective of global price trends.

The department said although it could not find evidence showing that dairy firms in Vietnam colluded with each other to hike prices, there was still a chance that such a ploy was used.

While milk prices keep surging, dairy farmers are struggling nationwide.

Nguyen Dang Vang, vice chairman of the National Assembly’s Science, Technology and Environment Committee, told Thanh Nien that dairy firms only pay local farmers around VND7,000 per liter of milk.

At this price, farmers suffer losses and find it too difficult to expand production, he said, noting that the country’s dairy cow population only grew 4.9 percent in recent years.

Asian markets slip as Bernanke fails to lift sentiment

Photo: Reuters

HONG KONG - Asian stocks fell Monday as traders were underwhelmed by the US Federal Reserve's strongest indication yet that it will inject cash into the economy.

The dollar edged down towards last week's 15-year low on the expected US pump-priming measures, while dealers also looked ahead to a meeting of G20 finance ministers to be held in South Korea at the weekend.

Hong Kong lost 1.21 percent, or 288.25 points, to end at 23,469.38 and Sydney ended down 0.79 percent, or 37.1 points, at 4,651.9.

Tokyo closed 1.76 points lower at 9,498.49 and Seoul slipped 1.41 percent, or 26.87 points, to 1,875.42.

Shanghai gave up 0.54 percent, or 15.93 points, to finish at 2,955.23.

Markets got an anemic lead from Wall Street, where the Dow edged down 0.29 percent on Friday despite Fed chairman Ben Bernanke saying the central bank was ready to take steps to boost the economy.

Bernanke said the current inflation rate was too low and raised the specter of deflation, which would send prices and wages spiraling downwards and force firms to the wall. Unemployment is already sky-high in the United States, with one in 10 people out of work.

"The risk of deflation is higher than desirable," he said.

The Fed was "prepared to provide additional accommodation if needed to support the economic recovery and to return inflation over time to levels consistent with our mandate".

Bernanke's comments raised already elevated expectations that the Fed is ready to pump billions into the financial system, in what is known as quantitative easing, effectively printing money.

However, IG Markets strategist Ben Potter said: "US leads were fairly mixed in terms of economic data and Bernanke didn't shed too much light."

"He sounded a bit cautious, so the market's thinking perhaps he will do any quantitative easing in smaller chunks," he told Dow Jones Newswires.

The dollar edged down in Tokyo trade. It was quoted at 81.15 yen, slipping from 81.44 yen in New York late Friday and heading towards last week's 15-year-low of 80.88 yen.

The Australian dollar was sitting at 98.33 US cents in European trade after it reached parity for the first time last week.

Profit-taking saw the Aussie dip back Monday after it peaked at $1.003 late Friday, the first time it has reached US parity since it was floated in December 1983.

The euro bought $1.3883 in Tokyo afternoon trade, down from $1.3973 dollars in New York late Friday. The European single currency briefly shot up to $1.4159, its highest since January 26, in New York.

The yen's gains have been capped by Japanese authorities' threats to intervene in the currency markets for a second time in just over a month.

Tokyo stepped into the markets for the first time in six years on September 15, selling the yen in a bid to shore up the country's key export sector.

"The dollar is drawing buy-backs against the euro and Australian dollar," said Tsunemasa Tsukada, chief manager at the currency sales desk of Mitsubishi UFJ Trust and Banking.

"I believe the longer-term trend is a weak dollar but some adjustment moves (on the dollar's recent plunge) are going on," Tsukada said.

The possibility of intervention comes amid growing fears of a currency war in which nations weaken their units to bolster their exporters and in turn give a much-needed boost to their economies.

The International Monetary Fund was holding a meeting with central bank officials from around the world to discuss the issue and try to plot a course for sustainable global recovery.

The meeting, hosted by the People's Bank of China in Shanghai, comes ahead of this week's Group of 20 meeting in South Korea, where currency reform is expected to dominate talks.

On oil markets New York's main contract, light sweet crude for November delivery eased 51 cents to $80.74 a barrel and Brent North Sea crude for December was 60 cents lower at $81.85 a barrel.

Gold closed at $1,356.00-$1,357.00 an ounce in Hong Kong, down from Friday's close of $1,378.50-$1,379.50.

Asian markets slip as Bernanke fails to lift sentiment