Vietnamese importers and producers complain that they are facing big difficulties since the Chinese yuan has soared from 2000 dong per yuan to nearly 3000 dong per yuan.
Yuan appreciation makes Chinese products more expensive
Wholesalers at An Dong Market in HCM City now do not like selling Chinese-made clothes and footwear because of the yuan appreciation. The yuan appreciation and transportation fee increase both have made the costs of the products increase by 30,000-50,000 dong.
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Big traders also complain that they are suffering from the yuan appreciation. A representative of a mobile phone trading company said he had to attend a company’s meeting, which lasted from 2 pm to 7 pm, only to discuss one agenda: whether to raise the sale prices of import products. The company finally decided that they will not raise the sale prices at this moment, when the demand is still low, even though the cost prices have increased due to the yuan appreciation.
According to Ngo Nguyen Kha, Deputy General Director of P&T Mobile, a company which outsources its products to China, a mobile phone which is priced as $20 now will see the price increase by 40,000 dong.
Nguyen Ha Doan from Anh Binh Telecom, the parent company of Q-Mobile brand, also said that the stronger yuan has made the production cost of products higher. Meanwhile, it is impossible to raise the sale prices at this moment, because consumer purchasing power is low.
The director of a company in District 1 in HCM City which trades materials and chemicals with Chinese partners, complained that the company always has to pay additional fees when making payments. The problem is that businessmen do not directly convert dong into yuan, but they always calculate the contracts’ value via a third hard foreign currency, the dollar, which forces the company to pay 1-2 percent more.
Businesses considering seeking other supply sources
Duong Quoc Nam, the owner of Pho Xinh, a well known trader of interior products, said that previously, when the US dollar price was high, Pho Xinh had to make payment in dollars. Now, since the Chinese yuan has appreciated, Chinese exporters are setting the original prices in Chinese yuan, and then converting into dollars. “In all cases, buyers have to suffer the price increases due to the yuan appreciation,” he said.
According to Nam, the materials imported from China have become 10 percent more expensive over the previous month. He is considering importing leather cloth from India, Malaysia or Argentina because the products have the same prices with Chinese products, and they also are of higher quality and have diversified patterns.
Since market demand remains weak, traders dare not raise their sale prices. Therefore, they have to make every effort to reduce their costs. Pho Xinh, Hatech, a consumer products company which has a factory in Long Thanh District in Dong Nai province, has also found other material suppliers instead of Chinese suppliers. Nguyen, Director of Hatech, said the paint used for non-stick frying pan was priced at 32,000-34,000 dong per kilo earlier this year. Meanwhile, as the yuan has appreciated, the price has climbed to nearly 40,000 dong per kilo. Nguyen said now if she buys the product from Singapore, she will have to pay $18 per kilo, or 35,500 dong per kilo only.
