Currently, grocers are reducing their orders from Thailand because traders are finding the prices too high.
"In the last two days I have increased prices for all kinds of goods, because the value of Thai baht is higher, and I have to follow accordingly," said Noi, a wholesale grocer in Nongduang market.
She explained that she was paying 283 kip per Thai baht yesterday (July 10), and needed to increase the price of every item in her shop by about 500-1,000 kip 5-10 US cents).
Noi usually sells one pack of milk for 7,000 kip (US$0.735), but yesterday she increased the price to 7,500 kip ($0.787). Sugar also increased in her shop from 5,500 kip ($0.577) to 6,000 kip ($0.63) per kilogramme.
The exchange rate offered by the Banque pour le Commerce Exterieur Lao (BCEL) yesterday stated that 1 baht was selling for 281 kip, compared to 279 kip of Monday.
Exchange rates on the black market were slightly higher yesterday, with 1 baht selling for 282.
A shopper in Vientiane, Latsamy said the price of consumer products in the markets have increased day by day, and traders always say Thai baht will keep strengthening, so if they don't increase their prices, they will lose money.
Some local producers in Laos who import raw material from Thailand have also been impacted by the exchange rate.
The manager of a plastic products factory, producing plastic bags, Souvanna Phommavong, said now the production value is more expensive due to the expense of raw materials from Thailand .
He said that previously, he paid 9.6 million kip ($1,000) per tonne for raw plastic material from Thailand, but now he has to pay more than 11.5 million kip ($1,200) per tonne, even though the price of the material in Thai baht is the same, but when he uses US dollars or kip to pay for the products, the price is more expensive.
However, he said even though the production value is more expensive, he will still keep selling his goods for the same price. He explained that many companies have not increased the price their goods to be competitive, so a smaller profit is better than none.
The governor of the Bank of the Lao PDR, Phouphet Khamphounvong, said that the central bank is looking for a way to deal with this problem, and urged people to try to buy more domestic products.
By Soudalath Phonpachith
Vientiane Times, Asia News Net