Market experts have predicted that the price of goods on the domestic market will keep rising significantly in December – the last month of the year.

Price hikes in essential goods such as food and foodstuffs will have a great impact on the domestic market. Therefore, it is imperative to launch price control measures.

According to the General Statistics Office, the consumer price index (CPI) in November rose by 0.4 percent against October, of which food and foodstuffs increased by 1.1 percent and other items by 0.2- 0.5 percent.

Market experts attributed the price hikes to an increasingly high demand for commodities during the last months of the year, particularly for the upcoming Traditional Lunar New Year Festival (Tet), which falls in late January. In addition, the adverse impact of the bird flu epidemic and unexpected global fluctuations in the prices of essential commodities have badly affected the domestic market.

Poultry products make up 30 percent of people’s daily meals and without them, households have had to use other sources of food such as pork and beef. In November, pork prices already rose by between VND3,000-5,000/kg and beef by between VND3,000-8,000/kg. Accordingly, the price of fruit and vegetables also rose up, putting more financial pressure on local people, particularly State workers and low-income earners.

Price fluctuations on the global market have also adversely affected the domestic market. Despite a small decline in patrol and gasoline prices, people’s increasing demand for gasoline in December and unstable political situations in some petroleum producing countries have sent crude oil prices going up. In addition, the prices of gas and fertiliser, which Vietnam has to import, are forecast to rise in the coming time.

Experts have forecast that the unexpected nature of the bird flu epidemic, high purchasing power during the last months of the year, and the impact of the recent salary adjustments will send commodity prices soaring sharply. CPI in December is expected to soar by 0.6-0.7 percent against November.

The Trade Ministry has called on key corporations and businesses to store up a large amount of essential commodities to intervene in the domestic market immediately if global market prices fluctuate. It also proposed flexible tax policies to the Government to regulate the import and export of essential commodities such as petrol, steel, cement and fertilisers, which are likely to soar dramatically in terms of cost.

The ministry said it will strengthen market management measures to combat smuggling and trade fraud, especially for petrol, and control and deal with any speculation or monopoly activity.

For consumer goods, the ministry said it has asked businesses to speed up production to ensure sufficient supplies of goods for domestic demand, and devise import plans to avoid a scarcity of goods on the market. It also asked provinces and cities to use other sources of food to replace poultry due to the bird flu epidemic.

The Ministry of Agriculture and Rural Development has proposed that the Government circulate flu-free poultry in unaffected areas to avoid insufficient supplies of food during Tet.

It has also proposed four solutions to curb price hikes in the coming time.

First, businesses should take account of consumers’ demands in order to curb sudden price increases and provide sufficient supplies of commodities for people, especially for those in natural disaster hit areas.

Second, businesses in charge of providing food to ethnic minority people in remote and mountainous areas need to prepare sufficient volumes of goods, which should be distributed to sales agents before Tet.

Third, it is essential to expand goods distribution networks, improve service quality, ensure hygiene and environmental standards and food safety, and facilitate trade activities at markets.

Fourth, businesses, market management units in provinces and cities throughout the country should closely co-operate with other relevant agencies to fight the smuggling of illegally- imported, counterfeit or low-quality goods and combat trade fraud. In addition, it is necessary to strictly control the slaughter, processing and circulation of poultry under current regulations on food quarantine and duly punish violations.

The recent Government decision to reduce patrol prices by VND500 per liter is consider an effective measure to stabilise market prices and control CPI growth.