Coal and power prices would not go up in the first quarter of 2011, said the head of the Ministry of Finance (MoF) Price Management Department, Nguyen Tien Thoa.

The ministry had taken the decision because prices of these two utilities often had a knock-on effect on other goods and services, which could lead to an unwanted general price rise, said Thoa at a press conference on Friday.

“Price fluctuations often occur at the end of the year owing to increased demand. Therefore, from now until early next year, MoF will focus on resolving difficulties in production. We want to balance supply and demand and to avoid any shortages, essentially in underprivileged areas.”

According to the General Statistics Office, the Consumer Price Index (CPI) is likely to hit 11 percent this year. Thoa said weaknesses of the economy had played a part in the increase.

”Growth depends mainly on increased investment but investment remains inefficient and competitiveness is low,” said Thoa at the press conference.

He added that the Ministry of Finance (MoF) had taken numerous steps to help stabilise prices.

“For example, MoF has instructed localities to use local standby budgets to provide non-interest capital for enterprises that trade reserved commodities; this will allow them to sell items at prices 5-10 percent lower than the usual market price,” Thoa said.

Thoa added that MoF had informed localities to delay the purchase of non-essential items to minimise demand-pull inflation.

“These classic solutions are significant if we want price stabilisation.”

MoF’s recent inspections in HCM City and several other southern provinces revealed that these localities had already stockpiled enough essential goods to meet local needs. Localities had also set up sales and distribution networks to better service underprivileged areas.

Thoa added the MoF had provided financial support to help regions facing severe weather to recover short-term vegetable crops and had urged local farmers not to export pigs, which were essential for the New Year holiday.

Forecasts predicted further economic recovery next year, which would lead to the increased demand for production inputs, and have an impact on prices.

“To that end, MoF will continue reforming the market-oriented pricing management mechanism, and respect enterprise and trader’s rights to set their own prices and forms of competition by replacing Pricing Ordinance by Pricing Law,” said Thoa.

“Next year, implementation of the market price scheme should be incorporated into the completion of the goods and service logistics system. We should also strive to reduce production costs and implement policies which ensure underprivileged households have access to basic social services including education, healthcare, and housing.”

Ensuring supplies

Deputy Minister of Industry and Trade Ho Thi Kim Thoa discussed measures aimed at market stability and ensuring adequate supplies of essential goods during Tet in meeting with officials from the HCM City Department of Industry and Trade last Thursday.

Department deputy director, Le Anh Dao, said firms had stockpiled 15,800 tonnes of rice and sticky rice, almost twice the quantity originally planned for. They had also put aside 9,800 tonnes of sugar (233 percent of the plan), 14,500 tonnes of meat, 5,200 tonnes of fruits and vegetables; and 55 million eggs.

At present, the Co.op Mart supermarket chain has stocks valued at 30 percent more than their planned value.

And it isn’t just firms that have signed up for a city price stabilisation programme that are stocking up; other companies are preparing for the year’s biggest festival which falls in early February this time.

German supermarket chain Metro has food stocks worth 1.1 trillion VND (56.4 million USD).

French supermarket Big C also has large stocks and has promised to keep prices and supply relatively stable for the next two months.

The MoIT has instructed the Department to continue working closely with firms to keep prices of goods like petrol, cement, and food stable during Tet.

Besides the eight essential goods targeted under the programme, authorities should also ensure adequate supply of cakes, candies, and jams for the Lunar New Year, Thoa said.

He said cities needed to ensure that all markets sell goods covered by the price stabilisation programme.

The Department of Transport should also give rush hour priority to vehicles delivering to supermarkets and shopping malls.

Source: VNA