production costs,vietnam economy,covid-19 impacts

The shocking price increase in a short time has pushed up production costs. Meanwhile, goods consumption also faces many difficulties due to the Covid-19 epidemic in the country.

Prices for petrol, gas surge

Topping the list of price increases in the year is gasoline. Domestically, the price of gasoline on January 11, 2021 was 16,930 VND/liter of RON95 gasoline and 15,940 VND/liter of E5 gasoline. On November 10, 2021, the price of RON95 gasoline increased to 24,990 VND /liter (up by 8,060 VND/liter) and 23,660 VND/liter of E5 gasoline (up by 7,720 VND/liter).

Along with the price of gasoline, the price of liquefied petroleum gas (LPG) has also increased dramatically in the past year. The LPG price on the global market in October reached 797.5 USD/ton, increased by 132.5 USD/ton (about 19.92%) compared to the previous month, up by 420 USD/ton (111, 25%) compared to the same period of 2020. On average, in January-October of 2021, the world LPG price was 604.2 USD/ton, up by 212.7 USD/ton (54.32%) year on year.

Due to the sharp increase in the world LPG price in October, the domestic retail price of LPG was adjusted to an increase of about 42,000 VND/cylinder of 12 kg from October 1, 2021 and by 17,000 VND in early November.

Thus, from the beginning of 2021, the retail price of LPG in Vietnam increased nine times (in January, February, March, June, July, August, September, October and November) and decreased twice (April and May), with a total increase of more than 100,000 VND/cylinder of 12 kg compared to the end of 2020.

Oil prices are also pushing fertilizer prices up. According to the data from the Ministry of Agriculture and Rural Development, Vietnam annually uses over 10 million tons of fertilizer. In 2020, the figure was 10.23 million tons, including 7.6 million tons of inorganic fertilizer and 2.63 million tons of organic fertilizer. Currently, the total registered capacity of domestic fertilizer factories is 29.25 million tons.

After a period of record price increases at the end of 2018, fertilizer prices have decreased and hit bottom in July 2020. From July 2020, fertilizer prices began to recover and increased in 2021. Since the beginning of 2021, fertilizer prices have continuously soared.

In the coming time, it is predicted that the fertilizer price on the world market will continue to increase due to the rise in prices for input materials and the export restrictions of some manufacturers as well as an energy crisis in European countries.


Steel prices fluctuate

From December 2020, the price of steel of all kinds suddenly surged and this period lasted until June 2021. The selling price of steel products in the first five months of 2021 increased due to fluctuations in input material prices. Steel billet price in May 2021 rose by 62% compared to February 2020 (from 9,433,697 VND/ton to 15,278,360 VND/ton) and increased by 41% compared to December 2020 (from 10,800,000 VND/ton) VND/ton to 15,278,360 VND/ton).

However, the steel market of Vietnam has stabilized.

The price for another construction material, cement, is still on the rise because the prices for input materials for cement production such as electricity, coal, head, gypsum... have all increased. Since late October, many cement manufacturers have increased the price of cement from 50,000-80,000 VND/ton in the Northern region and 80,000-100,000 VND/ton in the southern region.

The increase of prices for animal feed is also a burden for livestock production facilities. The price for chicken feed has increased by 27.8-29.8% while the price of pig feed has soared by 32.03%.

Although commodity prices rose, according to the General Statistics Office, the average consumer price index (CPI) in the first 10 months of 2021 only increased by 1.81% year on year, the lowest 10-month average increase since 2016. This is explained by low purchasing power because of social distancing and people's incomes decreasing.

It is estimated that the total retail sales of goods in January to October 2021 fell by 8.6% compared to the same period last year. In Ho Chi Minh City, the total retail sales of consumer goods and services decreased by 20.7%, and in Hanoi it fell by 7.8%.

Luong Bang

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