At present, the CPI has risen by 9.58 percent over the same period last year. Meanwhile, December’s CPI is predicted to increase by 1.3-15 percent, so keeping the whole year’s CPI at a single-figure is very difficult.

Despite the urgent measures being taken to control price hikes in the remaining months of this year and early next year, since late October, the prices of essential goods have continued to rise.

Businesses have attributed the soaring prices of steel, medicines, gas, sugar, milk and animal feed to an increase in the cost of imported input materials and fluctuations in the price of gold and the US dollar.

However, Thoa says price hikes on products that are not subject to input imports such food and foodstuffs, seafood, fruits and vegetables are unreasonable.

At a recent press briefing on measures to stablise market prices for the lunar New Year Festival held in Hanoi, the Deputy Director of the Hanoi Department of Industry and Trade, Nguyen Van Dong, said the price increases on some products are not because of insufficient supplies but due to psychological factors. When gold and US dollar prices soar, small entrepreneurs have increased prices themselves.

The fact is that essential products such as food and foodstuffs, fruit, vegetables, and cooking oil are still available and their prices remain stable.

Stockpiling sufficient goods to control price hikes

According to Thoa, the current supplies of domestic goods will fully meet consumer demand when the lunar New Year Festival (Tet) is approaching. The price of food and foodstuff is likely to see a slight increase due to the soaring price of imported input materials but there will no be an abrupt price increases during the Tet holidays.

Deputy Head of the Trade Department of Agro-Forestry and Aquatic Product Processing and Salt Making under the Ministry of Agriculture and Rural Development, Tran Thi Mieng shares her views with Mrs Thoa saying that the volume of food and foodstuffs is enough to satisfy domestic demand at the year’s end.

Despite the domestic demand for fruit and vegetables and food soaring by 5 percent, there are still sufficient supplies. In addition, the country annually imports 5-6 percent of all goods to meet domestic demands.

HCM City and Hanoi have signed contracts with meat suppliers through to the end of March next year which will help to prevent sudden price hikes at the year’s end.

Containing price hikes

The Hanoi Department of Industry and Trade has announced that consumer power from December, 2010 to January 2011 will increase strongly. It is estimated that the amount of retail goods in Hanoi during the Tet holiday will rise by 20-22 percent compared to previous months to around VND20,200 billion so CPI in December will also go up.

After a sharp increase in the prices of essential products, they are now leveling off, but will not drop.

Deputy Minister Ho Kim Thoa says it is very difficult to keep CPI in December at 0.4 percent, but the government will enforce strict measures to control price hikes.

To stabilise the domestic market it is essential to ensure enough essential products and foreign currencies for importing essential goods and to keep enough rice in stock to supply for the domestic market when necessary. The provinces and cities’ people’s committees will direct market management departments to step up inspections, especially at markets and shops, to prevent and deal with speculators and rising prices.

Thoa also says that the MoIT has asked all departments of industry and trade, groups and corporations to check their supplies of essential products.

Businesses which have been provided with loans to stockpile goods for Tet are committed to providing enough high-quality goods at reasonable prices during the Tet holiday. In case the market fluctuates, prices will be at least 10 percent lower than market prices, they promise.

Ho Chi Minh City has carried out a programme to stabilise the market in 2010 and during the Tet holiday. The city has provided VND380.6 billion for businesses to stabilise prices. Hanoi also has a plan to stabilise market prices with a total amount of VND500 billion, including VND100 billion for stockpiling relief aid when natural disasters or floods occur and VND400 billion for stockpiling essential commodities.

Furthermore, the ministry will hold regular checks and inspections to prevent speculators and control food hygiene and safety.

According to Hanoi’s Department of Industry and Trade, the city has provided loans worth VND400 billion to 14 businesses to reserve 9 essential products for Tet, equal to nearly 10 percent of the city’s total consumption of the nine essential commodities.

The Northern Food Corporation has prepared 2,600 tonnes of rice, the Petroleum Company in region I has reserved 40 million litres of petroleum, the Hanoi Beer, Alcohol and Beverage Corporation has stored more than 75 million litres of wine and beer while the Hanoi Confectionary Joint Stock Company is making around 400 tonnes of cakes and sweets.

All major commercial centres have reserved essential products for Tet worth more than VND1,200 billion.