[Vnbiz] Consumer Price Index May 2008 [SEC=UNCLASSIFIED]

Tue Jun 3 20:24:19 PDT 2008

Dear anh Hoanh

I am not an economist. However, can I jump in this topic with a practical 
approach: the increased income and the quality of living, in another word: 
price of living, reflecting somehow by CPI. Or how much do people have to 
pay for their necessities. How much time they need to work to achieve what 
they basically want: foods and drinks, houses, vehicles, and finallly some 
popular types of entertainment.

People talk about higher income in Vietnam. That's really correct...on the 
report. But please look at the ordinary people and the way they are 
struggling with life. I would like to take this as an example. My family 
built a house exactly this time 12 years ago. At that time, our contractor 
paid the posters, who carried tons of sand and cement from the ground to 
the top: 14 thousand dong (women) and 17 thousand dong (men). It was about 
1.5 USD per day at that time's exchange rate.

We have just revised the house. Not quite sure, but we guess that the 
current contractor should pay about 40-45 thousand dong per day. It is 
about triple in comparison with the past. 

The issue is that: 12 years ago, with 1.5 USD, they can buy 3 good "Pho" 
noodle bowl. Now, the increased daily income helps them to buy the same 
quantity of "Pho": 03. 

The consumption of a popular food become still uneasy for ordinary 
workers. Of course we hope such cases should be only happened during this 
difficulty situation of inflation. 

Regards

----------------------------------------------
Nguyen Quang ANH

"Tran Dinh Hoanh" <tdhoanh at gmail.com> 
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31/05/2008 12:20 PM
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Re: [Vnbiz] Consumer Price Index May 2008 [SEC=UNCLASSIFIED]

[ Vietnam Business Forum ]

Dear CACC,

This single big jump in food price in May really bothers me.  There is no 
apparent reason to explain it.  No sudden international or domestic 
shortage or pricing crisis that created such a sudden jump.  Hoarders can 
create a price crisis, but cannot maintain the crisis price if economic 
conditions are not ripe for such prolonging.  So, there must be some cause 
deep in the economy.  I've been thinking about this issue since I posted 
my previous message (below).  And here is my attempted answer.  This 
answer is, of course, theory as of now, until someone can prove it by 
facts.

I think there may be a succesful smuggling network channeling rice 
regularly to outside Vietnam.  The price control on rice has kept rice 
price (and therefore some other food prices) much lower than the 
international market.  And now there is a huge network of rice smuggling 
creating some good channels to distribute rice to the outside at a much 
higher price than domestic price.  Working like siphons, these 
distribution channels push the domestic price up to the level of outside 
price.  That is why food price made a big jump and is able to stay at 
such a high level. 

That is for now, unless someone comes up with a more plausible 
explanation.

Hoan 

On Fri, May 30, 2008 at 6:40 PM, Tran Dinh Hoanh <tdhoanh at gmail.com> 
wrote:
Dear CACC,

Thanks brother Phong for the anser about the 25 point in Roger Milton 
article.  

I think YoY number now will be very high, because it contains the "first 
quarter massacre" in it. So they tend to create confusion more than 
helping.  I like to look more at numbers reflecting current efforts to see 
how we are truly doing.

Now looking at the chart below again, and comparing May 2008 with April 
2008 (column 4), we have CPI increase 3.91 for the month of May alone.  
And the thing that really created this rise is food, which made a whopping 
20.78 increase.  This is the long lines in front of rice stores we saw in 
May.  20.78 in one month is the equivalent of 249.36 point a year!   

None of other items on column 4 has any serious increase.

I would love to understand why food had such a jump in May.  Is that 
successful crisis generation by hoarders? Or the food price somehow was 
too low before?

We need to go to each industry, each month, to figure out what happens, 
instead of just looking at general numbers.

Have a great day!

Hoanh

On Thu, May 29, 2008 at 10:22 PM, Tran Dinh Hoanh <tdhoanh at gmail.com> 
wrote:
Dear CACC,

This is CPI list from General Statistics Office of Vietnam for the first 5 
months of 2008 compared with the first 5 months of 2007.  The increase is 
19.04%.  Food price increases the most 31.87%, housing  construction 
material 20.37%, means of transport & communication 14.34% (of which 
telecommunication actually goes down  by -11.52%, does that means 
gasoline-related transport means increases by 25.86%?).

Have a good day!

Hoanh
__________
.

http://www.gso.gov.vn/default_en.aspx?tabid=462&idmid=2&ItemID=7156

Consumer price index

Rural area in the whole country

May 2008

Index in May 2008 compared with (%)

Index in the five first months in 2008 compared with same period in 2007

Base year 2005

May

2007

Dec. 2007

April 2008

Consumer price index

140.61

125.50

116.56

103.91

119.04

Food and foodstuff

163.45

142.60

127.14

107.12

130.53

Of which: - Food 

198.89

164.54

150.48

120.78

131.87

               - Foodstuff

151.55

136.20

118.90

102.27

131.44

               - Eating outside

156.49

131.99

122.53

103.07

124.29

Beverage and cigarette

122.54

110.61

107.45

101.72

108.06

Garment, footwear, hat

118.08

108.07

105.22

100.78

106.99

Housing and construction materials (*)

143.37

124.40

114.17

101.22

120.37

Household appliances and goods

116.37

107.03

104.77

100.91

105.78

Medical products and health care

114.66

107.12

103.30

100.50

106.79

Means of transport and communication

132.79

117.94

111.73

100.53

114.34

Of which: Postal services and Telecommunication

84.48

88.36

91.07

99.89

88.48

Education

109.88

102.80

101.65

100.45

102.22

Culture, sport and entertainment

106.29

102.98

103.20

100.55

101.57

Other consumer goods and services

124.10

111.38

106.70

100.38

110.94

(*) Including: housing, electricity, water, fuel and construction 
materials.

-- 
Tran Dinh Hoanh, Esq., LLB, JD
Washington DC 

-- 
Tran Dinh Hoanh, Esq., LLB, JD
Washington DC 
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