Declining US dollar gives edge to imports

The dollar prices fell by nearly VND2,000 on the unofficial market compared to late February and by more than VND1,000 at commercial banks.

Nguyen Ngoc Minh, a sugar merchant at the Xom Chieu Market in District 4, told the Sai gon Tiep thi (Marketing Sai Gon) newspaper that white sugar at the London Exchange was currently trading at US$592.7 a tonne, which would be sold at VND15,000 a kilo when imported to Viet- nam after taxes and transport fees have been added.

This was cheaper than domestic sugar that was priced at VND24,000-25,000 a kilo. The price difference has enabled imported sugar to flood the domestic market, Minh said.

Hoang Thi Thuan, owner of a business that imports and distributes processed foodstuff in District 1, said wholesale imported foodstuff prices have fallen by 3-5 percent over two months ago.

She added that importers could easily buy dollars at listed price from banks but most would opt to buy the greenback on the unofficial market at slightly lower prices.

A market survey by SGTT showed a reduction of VND3,000-10,000 a kilo for almost all imported fruit while that of imported confectionery, including boxes of chocolate, fell by VND5,000 per unit.

Phan Van Thien, deputy general director of Bibica, a confectioner, said the lower foreign exchange rate as well as purchasing power have forced importers to reduce prices of several products for fear that slow sales would send them past their expiry date.

He said imported goods were currently only 10 percent more expensive than domestic ones, instead of the usual gap of 20 percent. Hence domestic goods faced tougher competition not only in terms of prices, but also packaging and design, taste as well as seasonal consumption demand, he added.