Milk prices remain high

HCM City (VNA) - Retail milk prices remain high even though the cost of raw materials has decreased by half in recent months.

Dairy importers say the prices of imported full-cream and skimmed milk
powder have fallen by 40-50 percent to around 3,400 USD per tonne and
2,800-3,000 USD.

But the retail price of milk remains at 85,000-159,000 VND (9.5 USD) for a
400-gramme can depending on the brand, up at least 20,000 VND this year.

A 900-gramme can costs 179,000-400,000 VND (26 USD), up to 50,000 VND
higher.

Nguyen Muoi, a milk distributor in HCM City 's District 3, said the
current milk prices are the highest ever.

Huynh Dong Tuan, manager of Citimart Supermarket, said he has yet to
receive information from milk producers and distributors about cutting
prices.

Last month milk sales fell by 50 percent due to the melamine scare. To
stimulate demand, the dairy industry offered gifts to buyers rather than cut
prices.

Deputy general director of Vietnam Dairy Milk Joint Stock Company
(Vinamilk), Tran Bao Minh, said though raw material prices have fallen,
Vinamilk cannot cut prices because the prices of cans and butter have
increased by 50 and 80 percent.

Furthermore, the dollar has strengthened and workers' salaries have gone
up, he said.

Truong Van Toan, head of Dutch Lady Vietnam's legal and external
department, said his company does not plan to cut milk prices until
year-end.

Analysts say since milk is an essential item, consumers buy irrespective
of price.

With Vietnamese consumers believing price is linked to quality, milk
producers and distributors always find ways to hike prices, they say.

Though retail prices are high, local dairy farms are not benefiting.
Several household farms in HCM City's Cu Chi and Hoc Mon district say dairy
companies pay them just 5,400-7,300 VND (0.4 USD) per kg of fresh milk.

With animal feed prices high, many of the households, unable to cope with
the losses, have sold their cows.-Enditem