The dollar price on the unofficial market in HCMC on Monday afternoon was VND20,400 for buying and VND20,450 for selling, and the respective prices in Hanoi were VND20,430 and VND20,470. Those prices were up VND50 from last Friday and VND430 from 10 days ago.
In industries where 70% to 80% of materials are imported, the strengthening dollar is hitting them hard.
Bui Quoc Cuong, director of Long Chau Group, an animal feed manufacturer in Dong Nai Province, said import prices of materials had edged up 30% in the past two or three months.
“For palm oil, coco oil, soya beans and other materials, their import prices are now 30% higher than in August but supply still falls short,” he said.
Cuong said he also paid an extra VND1,000 to buy each dollar on the black market, which was trading the greenback at VND20,500 per dollar. His company spends several million dollars on material imports.
When the extra cost is factored into product selling prices, his company’s goods will become dearer.
The pharmaceutical industry has also suffered from the weakening dong as it heavily depends on materials imported from other countries. It has had to spend more dong to buy dollars to pay for the imports.
Mebipha Co. said it had had to switch to using locally made materials and selling finished products rather than supplying materials only as before.
When the forex rate on the unofficial market rose above VND20,000, transactions with foreign suppliers have come to a virtual stop, the company said. “We are keeping an eye on market movements to decide what to do next.”
Huynh Phu Quoc, import-export director of Truong Thanh Furniture Corp, said his company had shifted to borrowing the dong instead of the dollar for fear that the local currency would further fall. The company spends big on wood import.
“With a bit of luck we import materials and export our products as well, so the forex rate fluctuations have not impacted on us much. Nevertheless, it would be of greater help if the forex market is stable,” he said.
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