Food prices plummet as demand, production costs fall

Oanh, a footwear worker in Ho Chi Minh City’s Tan Binh District, said: “Prices of eggs, meat and vegetables are down 10-30% compared to a year ago, and the prices of some items have even halved.”

In traditional markets and modern supermarkets, prices of green vegetables have dropped the most, with lettuce, watercress and broccoli costing VND25,000-35,000 (US$1.06-1.49) per kilogram, down 30%.

Tomato, cucumber and green onion are 50% cheaper at VND10,000-30,000. Fresh meat prices are down 10-30% and those of fruits, 10-20%.

Traders attributed to the low prices to weak demand and abundant supply. “Demand has decreased by 20-30% from last year,” Hien, a vegetable seller at Xom Moi Market in the city’s Go Vap District, said.

According to the Ministry of Agriculture and Rural Development, the supply of livestock, poultry and vegetables increased by 3-5% year-on-year in the first five months of this year, and so the prices of many goods have decreased sharply.

Transportation costs fell by 5-7% thanks to a 30% drop in gasoline and oil prices in the first six months. That also helped lower commodity prices.

RON 95 III gasoline has fallen to VND22,010 per liter now from VND32,870 on June 21, 2022. Transporters in HCMC said freight rates are down 10-25% to VND1,500 per kilogram of cargo for distances of over 500 kilometers.

Shoppers at a Go supermarket in Ho Chi Minh City on June 18, 2023. Photo by VnExpress/Thanh Tung

Globally, raw materials have decreased. The International Monetary Fund said global basic food prices fell 21% in the first five months of this year from the same period last year.

According to the Food and Agriculture Organization of the United Nations, the prices of the world’s most traded staple foods such as cereals, milk and cooking oils have fallen by 22% in the past year.

The prices of vegetable oils like palm oil, soybean oil, grape seed oil, and sunflower seed oil have plummeted by 48%.

Ayhan Kose, deputy chief economist of the World Bank, said global basic commodity prices are in a downtrend now because economic growth has slowed down, and the impact of armed conflicts and the pandemic weakened demand.

However, the economy would be better in 2024 if central banks adjust their monetary policies in accordance with the market situation, he said.

Modern retailers in HCMC expected the consumer market to recover in the third quarter when there are festivals.