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Chinese keep collecting materials, businesses keep complaining
Some analysts believe that the fact that Chinese businessmen scrambling for farm produce has caused chaos in the market and pushed the CPI increase more sharply.
However, Dr Nguyen Van Nam, former Head of the Trade Research Institute, argued that when there are many buyers, farmers will have the chances to sell farm produce at higher prices. Meanwhile, the problems which have been arisen from the massive material collection should be blamed on the bad management of Vietnamese state agencies.
Foreign businessmen have gained the upper hand over domestic enterprises in collecting materials in the market, while the scrambling for materials by foreign businessmen has pushed the prices up.
According to Nam, there is no other country in the world which allows foreign businessmen come to their countries to collect materials so easily. State management agencies should have learned to find out for what purposes the foreign businessmen collect materials in Vietnam. It is really the thing that needs to be done. In the past, the campaigns of collecting anise roots and buffalo toenail, once sabotaged Vietnam’s agricultural production.
Dr Nam believes that Vietnam should not prohibit serious foreign businessmen, who plan long term business in Vietnam. However, they must be registered businesses and they must pay tax as stipulated by the current laws.
When carrying goods out of the national boundary, the businesses must pay tax. Meanwhile, other business activities undertaken by the businessmen in Vietnamese territory must be supervised to be sure that the activities do not cause chaos to the domestic market.
While domestic businessmen always bear strict supervision by the state management agencies, foreign businessmen seem to be “given a free hand”.
Dr Nam also thinks that this should be seen as a lesson for domestic enterprises and they should change the way they collect farm produce from farmers. The collection should be based on the principle of mutual benefit, while enterprises need to take act on their own initiative and don’t sit at their office and ask farmers to bring farm produce.
Meanwhile, Vu Vinh Phu, Chair of the Hanoi Supermarkets’ Association, has attributed the price escalations to the bad distribution network.
According to Phu, farmers sell farm produce at their fields very cheap, but customers still have to buy high. It is because the products go through many intermediary hands before reaching out to consumers. In general, the retail prices are 3-4 times higher than the original prices.
A kilogram of fish in Thanh Hoa is priced at 8000 dong, while it is selling at 30,000-40,000 dong per kilo in Hanoi. A kilogram of tomato is sold by farmers in the provinces neighboring to Hanoi at 500 or 1000 dong, while Hanoians have to pay 8000 or 9000 dong.
In April and May, sugar refineries, which had 500,000 tons in stocks, sold to general sales agents at 16,000-17,000 dong per kilo only. However, the retail price on the market was 25,000 dong.
A question has been raised that why supermarkets do not cooperate with each other to force the prices down. If distributors can buy goods straightly from producers and then sell directly to consumers, the prices will be much lower.
The answer is, according to supermarket chains, they cannot contact producers and importers of essential goods.
The problem is that producers and importers do not sell goods directly to supermarkets, but they only sell to their general sales agents who will later sell the products to sales agents at lower levels.
As such, the loosened management over the wholesale activities has led to the consequences that Vietnam cannot control the retail activities.
Tam Nhin
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