Ministry says costs prevent milk prices from dropping

Wednesday, Sep 23, 2015 08:01

A staff member at Co-op Mart introduces milk products to a customer. The prices of milk products for children under six can not be cut further. — VNA/VNS Photo Thanh Vu

HA NOI (Biz Hub) — The prices of milk products for children under six cannot be reduced because of increase in salaries, electricity prices and the exchange rate, the Ministry of Finance said on Monday.

According to the ministry's price management department, the domestic market has milk products for children under six, which are made in Viet Nam and imported from other countries.

The prices of domestic milk products have suffered the impact of world prices of milk and input costs, including fuel, sales and labour, while the price of imported milk products includes import price and distribution costs.

The department said the selling price of finished milk products for children under six was stable because, according to the General Department of Customs, import prices of those products to Viet Nam have been stable from June 2014 till now.

Regarding domestic milk production, offer prices for some varieties of raw material for milk in Western European and Australian markets had reduced from April after an increase in the first three months of this year, according to the Ministry of Industry and Trade.

The material is imported to produce finished-milk products for people, including children under six, and also to process confectionary products.

On the local market, the selling price of domestically-made milk products for children under six includes price of material, salary, and advertising cost, apart from electricity prices and distribution cost.

Minimum salaries, according to region, increased 14 per cent and electricity prices surged 7.5 per cent from March. The ceiling cost of advertising had been abolished and the trading band for the inter-bank exchange rate was expanded by 5 per cent since June 2014.

Due to these factors, the selling prices could not be reduced, the department said.

In addition, the prices of milk products for children under six had fallen between 0.1 per cent and 34 per cent since June 2014 after the state implemented solutions to stabilise prices.

The prices are expected to remain stable till 2016 if the market does not experience unexpected changes, according to the department.

Now, the Ministry of Finance is following closely any changes in prices of raw materials required for milk production in the world markets and the list of selling prices from dairy firms.

The ministry has asked firms to make reasonable calculations for the selling price of their milk products. — VNS

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