Imported stuff to cost more with latest depreciation

PETALING JAYA: Much of the country’s business is transacted in US dollars and this will affect the cost of imports – not just from the United States – but from many parts of the world.

Imported food, dairy products and component parts are on the list of items affected by the ringgit’s depreciation against the US currency.

Federation of Malaysian Manu­fac­turers president Datuk Seri Saw Choo Boon said it was likely that manufacturers who depended on imported components from the US would eventually pass the cost changes to consumers.

The ringgit weakened past the crucial 4.0000 level late on Wednesday morning against the US dollar, in tandem with weak Asian currencies, with China’s yuan hitting a four-year low after Beijing devalued the currency.

Saw said business on the whole would be hit as consumers would find it hard to cope with high costs.

“We hope the ringgit will stabilise and go back to what it should be,” he said.

An official from a major Japanese car brand said the weakening ringgit would definitely impact the cost of cars sold in the country, even those that were locally assembled.

He said this depended on the percentage of local content for a specific model, with some having up to 70% imported content.

“Although, we get most of our car parts from Thailand and other Asean countries, much of the business transactions is in US dollars,” he said.

He added that it would take some time to clear current stocks before new prices might be seen.

Malaysian Exporters Association president Abdul Kabur Ibrahim said not many exporters were taking advantage of the drop in the ringgit.

“Depending on the items, if the products are using local raw materials such as palm oil and rubber, the price should be cheaper for the buyer.

“This is because the quality of the item is the same, but the cost to produce it is much cheaper.

Penang Importers and Exporters Association (PIEA) president Ng Hooi Lai, however, felt that exporters were facing problems as the raw materials they bought were now more expensive.

“It is difficult for us to compete with traders from China and Indonesia,” he added.