Food service prices keep surging despite lower input costs
By Minh Tam - The Saigon Times Daily
HCMC – Restaurant service prices have continued to rise in June versus the preceding month even though input items such as food, foodstuff and gas are down.
June’s national consumer price index (CPI) recently announced by the General Statistics Office is down 0.26% against May with prices of five out of the 11 groups of items in the CPI basket sliding and the remaining six marking up slightly.
Among the items with price declines, food and catering services – which account for 40% of the basket of items used to calculate the CPI – slip 0.23% versus May, with food and foodstuffs down 0.78% and 0.31% respectively.
Despite food and foodstuff price drops, restaurant services still pick up 0.6% against May.
Other commodity groups that are down this month are housing, power, water, gas and building materials, dropping 1.21% against May; transport, losing 1.64% as a result of fuel price cuts on June 7 and May 23; telecommunications, declining 0.02%; and culture, entertainment and tourism, down 0.27%.
On the other hand, six groups have seen price increases, with apparel, hats and footwear recording the sharpest rise of 0.62% as demand for summer sales is up.
Household equipment and healthcare services share the same increase rate of 0.46%. Other goods and services, beverage and tobacco, and education mark up 0.35%, 0.33% and 0.1% respectively.
As such, the January-June CPI rose 2.52% against December 2011 and 6.9% year-on-year. These are encouraging signs that the economy can achieve the inflation target this year.
The food and foodstuff group, with the strongest decline, has contributed greatly to pulling down the CPI. However, the June CPI in rural areas, where a majority of food items are produced, and that in urban areas are down altogether, at 0.26% from the previous month.
The increase and decrease rates are quite similar, showing the distribution stage is facing several problems such as too many intermediary steps pushing up prices of goods from producers to consumers.
Farmers in rural areas, though producing rice, pork and vegetables, still have to buy products at prices several times higher than their sale prices.
At the local level, most cities and provinces have seen the CPI plummeting this month over May. Only a few provinces such as Vinh Long and Gia Lai recorded a month-on-month CPI increase of 0.29% and 0.1% respectively.