THE ECONOMIC SITUATION IN SOUTH VIETNAM

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP82S00205R000200010051-6
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 8
• Document Creation Date: December 20, 2016
• Document Release Date: August 28, 2006
• Sequence Number: 51
• Publication Date: January 13, 1969
• Content Type: IR

App owed For Release 2007/03/08IA-P$Q~056C004,51-6
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DIRECTORATE OF
INTELLIGENCE
Intelligence Report
The Economic Situation in South Vietnam
(Weekly)
State Dept. review completed
USAID review completed
Secret
128
13 January 1969
No. 0476/69
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RDP82S00205R000 010051-6
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WARNING
This document contains information affecting the national defense of the
United States, within the meaning of Title 18, sections 793 and 794, of the
US Code, as amended. Its transmission or revelation of its contents to or
receipt by an unauthorized person is prohibited by law.
GROUP
IEXCLUDXD FROM AUTOMATIC
DOWNORADINO AND
DXCLABSIFICATION
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CENTRAL INTELLIGENCE AGENCY
Directorate of Intelligence
The Economic Situation in South Vietnam
Summary
Deliveries of rice from the delta to Saigon
during 1968 were 10 percent above the level of 1967.
The public reaction to the recent official increase
in the price of imported rice continues to be
unfavorable, even in the delta. Additional surveys
of the current rice harvest still indicate that the
1969 rice crop in the delta will be about 15 percent
below that of 1968.
Retail prices in Saigon rose three percent
during the week ending 30 December, ending the year
1968 with an increase of 32 percent. Prices of
imported commodities held steady at 11 percent above
the level of 3 January 1968. Free market currency
and gold prices continued to increase slightly
during the last week in December. During 1968 price
increases for currency and gold ranged from 18 to
30 percent.
ANNEX: Weekly Retail Prices in Saigon
(table)
Weekly and Monthly Currency and
Gold Prices (graph)
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Rice Situation
1. Deliveries of rice from the delta to Saigon
during 1968 totaled 310,000 metric tons, an increase
of 10 percent above the 1967 level. Unlike previous
years, however, almost two-thirds of the deliveries
were made during the second half of the year, and
deliveries were especially large in November and
December. Deliveries in December amounted to 42,600
tons--the largest for any month since April 1965.
During the first six months of the year deliveries
of the delta surplus lagged 30 percent behind the
1967 level, because secure transport and price
incentives were lacking. However, as roads and
water routes became more secure and the government
acted to boost rice, prices by purchasing rice in
October and raising the price of imported rice in
November, deliveries picked up.
2. According to the embassy, the price of
paddy received by delta farmers has risen 10 to 15
percent since mid-November. The increase is attri-
buted mainly to the official 25-percent increase in
the price of imported rice, but also to the fact
that merchants increased their purchases of paddy
in order to meet the delivery schedule for the rice
purchased by the government in October, Retail rice
prices in Saigon have been relatively stable at a
new higher level since mid-October, and embassy
officials expect them to remain so,
3. Public reaction to the higher rice prices
has been generally unfavorable even in the delta.
Civil servants and military personnel as well as
the poorer farmers who sell no rice have complained
that higher prices will bring higher prices for
everything else they must buy, Province officials
as well as American advisers in I and II Corps
maintain that the increase in the price of imported
rice serves only to impose another burden on an
already impoverished populace. Because farmers in
these rice-deficit areas grow little rice for market,
higher rice prices will not add significantly to
rural incomes.
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4. After further investigation the embassy still
believes that the delta rice crop currently being
harvested will be about 15 percent smaller than the
1968 crop because of damage from drought and the
resultant intrusion of salt water. No estimates are
available for production in the rest of the country,
but it is likely that output in I-III Corps also will
be lower than last year. Nevertheless, because of
the current high level of rice stocks in Saigon and
the major port cities of I and II Corps, it is possible
that imports will not have to be increased in 1969.
Prices
5. The final 1968 sampling of retail prices in
Saigon for the weekly USAID index showed prices up
three percent from the previous week. The increase
in prices for the year was 32 percent compared with
an increase of 36 percent during 1967. Embassy
officials currently estimate that prices will increase
40 to 60 percent in 1969 depending on many factors
including the actual size of the budget deficit,
revival and expansion of domestic output, the level of
imports, andpressure for wage increases. During the
week ending 30 December food prices rose two percent
to a level 33 percent above that of 2 January 1968.
Prices of nonfood items increased three percent,
ending the year 31-percent higher than on 2 January.
The price of the grade of rice used in the USAID
index rose 10 percent during the first eleven months
of the year and another 13 percent during December.
The latter increase was a result of the government's
decision to raise the price of imported rice, large
supplies of which had held down prices of domestic
rice. (A table of weekly retail prices in Saigon is
included in the Annex.)
6. The price index for imported commodities
held steady during the month of December at a level
11 percent above that at the beginning of the year.
During January-November prices of imports had risen
only six percent--the remainder of the increase was
mainly the result of the official increase in the
price of US rice.
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Currency and Gold
7. Free market currency and gold prices contin-
ued to increase slightly during the week ending 30
December. The price of dollars rose two piasters to
200 piasters per dollar, compared with a price of
170 piasters both at the beginning of the year and in
mid-June. The end-of-year rate for MPC (scrip) was
155 piasters per dollar, or 33 piasters higher than
on 2 January 1968. Since 21 October, when all scrip
certificates were called in and new ones issued, the
price has increased 20 piasters. On 30 December the
price of a dollar's worth of gold leaf was 284
piasters, compared with 218 piasters on 2 January
1968. Most of the increase occurred during the first
six months of the year as a result of the world gold
crisis in March and the reduction in the supply of
gold from Laos because of the Tet and May-June
offensives. (A graph on weekly and monthly currency
and gold prices is included in the Annex.)
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Weekly Retail Prices in Saigon
3 Jan
2 Jan
9 Dec
16 Dec
23 Dec
30 Dec
1967
1968
1968
1968
1968
1968
All It
225
308
394
392
398
408
ems
Index for
-
242
d It
F
24
~
446
441
~47
456
ems
oo
Index for
-
Of Which:
(In Piasters)
Rice-Soc Nau (100 kg.)
1,700
2,500
2,900
3,000
3,000
3,100
Pork Bellies (1 kg.)
130
220
280
270
280
N.A.
Fish-Ca Tre (1 kg.)
150
230
300
280
310
N.A.
Nuoc Mam (jar) 90
150
220
220
220
N.A.
Index for Nonfood Items
195
241
298
222
22-7
2L6
Of Which:
(In Piasters)
Firewood (cu. meter) 560
600
760
760
760
N.A.
Cigarettes (pack) 14
14
22
22
22
N.A.
White Calico (meter) 33
52
60
64
70
N.A.
Kerosene (liter) 10.5
9
10
10
10
N.A.
a. Data are from USAID sources. For indexes 1 Jan 1965 = 100.
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ee a _ . ?' ncy Pries
US $ REEN
U, M
e i t Payment Cerf~fi ates scrip
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