Food service prices keep surging despite lower input costs
Restaurant service prices have continued to rise in June versus the preceding month even though input items such as food, foodstuff and gas are down.
June’s national consumer price index (CPI) recently announced by the general Statistical Office is down 0.26 percent against May with prices of five out of the 11 groups of items in the CPI basket sliding and the remaining six marking up slightly.
Among the items with price declines, food and catering services – which account for 40 percent of the basket of items used to calculate the CPI – slip 0.23 percent versus May, with food and foodstuffs down 0.78 percent and 0.31 percent respectively.
Despite food and foodstuff price drops, restaurant services still pick up 0.6 percent against May.
Other commodity groups that are down this month are housing, power, water, gas and building materials, dropping 1.21 percent against May; transport, losing 1.64 percent as a result of fuel price cuts on June 7 and May 23; telecommunications, declining 0.02 percent; and culture, entertainment and tourism, down 0.27 percent.
On the other hand, six groups have seen price increases, with apparel, hats and footwear recording the sharpest rise of 0.62 percent as demand for summer sales is up.
Household equipment and healthcare services share the same increase rate of 0.46 percent. Other goods and services, beverage and tobacco, and education mark up 0.35 percent, 0.33 percent and 0.1 percent respectively.
As such, the January-June CPI rose 2.52 percent against December 2011 and 6.9 percent year-on-year. These are encouraging signs that the economy can achieve the inflation target this year.
The food and foodstuff group, with the strongest decline, has contributed greatly to pulling down the CPI. However, the June CPI in rural areas, where a majority of food items are produced, and that in urban areas are down altogether, at 0.26 percent from the previous month.
The increase and decrease rates are quite similar, showing the distribution stage is facing several problems such as too many intermediary steps pushing up prices of goods from producers to consumers.
Farmers in rural areas, though producing rice, pork and vegetables, still have to buy products at prices several times higher than their sale prices.
At the local level, most cities and provinces have seen the CPI plummeting this month over May. Only a few provinces such as Vinh Long and Gia Lai recorded a month-on-month CPI increase of 0.29 percent and 0.1 percent respectively.
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Category: Economy
