Foodstuff prices rise, pose inflation threat

May 18, 2021 - 09:18
Prices of foodstuffs have been increasing due to rising costs of raw materials.


A supermarket in HCM City. With the costs of materials needed for foodstuffs rising, businesses are finding ways to cut costs so that they can keep prices steady. — Photo

HCM CITY — Prices of foodstuffs have been increasing due to rising costs of raw materials.

Ðỗ Văn Khuôl, supply director of Saigon Food Company, said the cost of both domestically sourced and imported inputs have risen, including those of rice and seafood, whose output has fallen.

COVID-19 is driving up the costs of imported ingredients, and prices could rise by 10-25 per cent in the third and fourth quarters of this year, he warned.

Suppliers of products like chicken drumstick, dried cheese and macaroni in the US or Europe are planning to increase prices by up to 50 per cent this year, according to many large supermarkets that are having to negotiate with their suppliers.

This is putting pressure on grocery shoppers struggling with falling incomes and businesses and restaurants who are forced to increase their prices to cover the rising costs of items such as cooking oil, sugar and flour.

Nguyễn Anh Đức, general director of Saigon Co.op, said that in April suppliers notified that they were planning to increase prices in May, especially of cooking oil, milk and instant noodles due to a rise in production costs.

The retail chain is considering each price increase proposal to come up with a reasonable pricing roadmap for each product and spread out the price increases gradually instead.

It is asking suppliers and manufacturers to temporarily take a cut in profits to reduce the pressure on consumers, and encouraging them to work with it to launch promotions, he said.

According to foodstuff manufacturer Acecook, instant noodle production costs have been rising since the final quarter of 2020, and so it has been making efforts to cut costs and wastage before considering price hikes.

Other food businesses are also cutting costs and restructuring to avoid increases in prices.

Deputy Prime Minister Lê Minh Khái has called on local authorities to keep a lid on consumer prices in the remaining months of 2021.

Nguyễn Anh Tuấn, head of the Ministry of Finance’s price management department, said his department would monitor prices, especially of essential goods, and propose solutions to stabilise demand and supply if needed. — VNS