Businesses left handicapped

By DALE LUMA
BUSINESSES say the ongoing foreign exchange (FX) currency shortage in the country is at its worst with unconfirmed rumours that there is currently no available US dollars.
This has resulted in company projects being delayed as well as creditor debt increasing for some businesses.
Paradise Foods Ltd chief executive officer James Rice told The National last week that it also seemed that the Covid-19 pandemic had also added to the issue.
“The foreign currency availability is worse than ever and we are now months behind on paying our suppliers,” he said.
“What’s worse for us is our expansion products are delayed because we cannot get the foreign currency to purchase the manufacturing equipment we need.
“Where we could have started new production this year with local manufacturing and more local jobs, we are now looking at next year for these projects.
“It appears (but I do not know) that large exporters who are the source of foreign currency have slowed down significantly.
“Our only hope now is the small exporters, those people that export coffee beans, cocoa beans and vanilla.”
Trukai Industries Ltd chief executive Greg Worthington-Eyre shared the same sentiments.
“Forex appears worse than previous times and so our creditor balance has been growing,” Worthington-Eyre said.
“At this stage, it is not impacting the supply of product or goods and services, although we need to watch this closely.
“More concerning is the drop in the rate by 25 basis points in March and early April, which has made all debts more expensive.
“This places upward pressure on pricing although Trukai is absorbing it at the moment to ensure food security and affordability is maintained.
“Extended credit from suppliers is the norm now, however, we balance out the currency we do get to ensure everyone is treated fairly.
“Ultimately the growing cost of forex will drive prices up.
“It is either that, or (and) quality lowers to keep prices down, product offerings shrink to reduce operating costs, inventory reduces to reduce debt and, people lose jobs to reduce costs.
“However this is more to do with lower productivity, sales or market conditions.
“These are standard business activities and nothing unique to any business.
“At Trukai, we are absorbing what we can and looking at ways of reducing cost.”
Brian Bell chief executive Cameron Mackellar said: “It is a genuine issue for every business importing product.
“The last few months have been difficult and we have seen very lumpy periods of FX relief.
“We are in constant communication with our bankers and they certainly try to help wherever possible.
“However, as a result of softening business conditions, I can only assume the overall demand for FX has reduced as well (but not from us).”
Several attempts by The National to get comments from Bank of Papua New Guinea were unsuccessful.