Import companies prove to be the biggest sufferers from the dollar price decreases. They have to apply a lot of measures to save the production.

Bui Quoc Cuong, General Director of Dong Nai-Long Chau Company, said that the dollar appreciation has led to the sharp price increases of input materials used to make animal feed. Fish powder price, for example, has increased from 7500 dong to 10,500 dong per kilo.

According to Cuong, the prices of import and domestically made materials have increased because the dollar has increased by 20-30 percent in value in the last three months. Meanwhile, the sale prices of finished animal feed products have increased by 200-300 dong per kilo, or three or four percent. Feed producers cannot raise the sale prices any further, because of the stiff competition on the market.

Regarding the dollar supply, Cuong said his enterprise purchases dollars at 20,500 dong per dollar on the black market, sells to banks at 19,500 dong per dollar, and then import products. The problem is that commercial banks do not have dollars to sell to enterprises, and Cuong has to seek dollars on the black market and tries to legalise the purchases.

Director of a pharmacy company said that he has to change the company’s production strategy due to the dollar appreciation. In order to cut down expenses, his company has tried to use more materials supplied by domestic sources rather than relying on imports

A senior executive of a wooden furniture company said that since the dong/dollar exchange rate has been fluctuating so heavily, he has to borrow money in Vietnam dong instead of the dollar, because he fears the dollar would appreciate further.

“Previously, we preferred borrowing money in dollar. However, since the dollar has been appreciating, borrowing in Vietnamese dong should be the first choice,” he said.

Director of a business said he always tries to buy dollars under option contracts in order to minimize risks. However, at this moment, banks do not like to provide this service, because the dollar supply is not profuse, while it is difficult to predict the dollar price performance.

The dollar price in the black market remains sky high. On November 2nd morning, the dollar price increased by another 10-20 dong per dollar to 20,470 – 20,510 dong per dollar (purchase and sale prices).
The steady dollar price increases have kept the gold price sky high, though the gold price has decreased slightly to follow the price decreases in the world market.

The gold price, after hitting the record high at 33.55 million dong per tael yesterday, has decreased slightly. At 9 am of November 2nd, SJC brand gold was traded at 33.38-33.43 million dong per tael in HCM City. SBJ brand gold was traded at 33.42-33.46 million dong per tael at the same time.

In the world market, the gold price on Comex decreased by $10 per ounce last night. The gold price in Asia is now staying at $1353.2 per ounce.

Source: VNN