Cost of goods increasing

By MARK HAIHUIE
PRICE of goods have increased as a “flow-on result” of import markups, according to the National Development Bank managing director Moses Liu.
Liu said that local businesses and consumers would “cop the cost” passed on by importers brought on by the declining value of the kina and the foreign exchange shortage.
“The importers would have bought (goods) with a higher cost than before when the currency was okay,” Liu said.
“But the additional downgrading of the PNG kina to the US dollar means that importers are paying the premium. The premium will not be borne by the importer but by the ordinary Papua New Guinean.
“This situation is not helped by the ongoing foreign exchange shortage which will also make prices go up.
“That is why the cost of goods are expensive. And recently you will note that most people such as average workers are suffering as they do have enough money because every item on the shelf has a foreign currency cost to it because of the importation.
“The increased costs associated with the low currency has a direct bearing on the high costs of goods in the country.
“SMEs and individuals will be impacted by this simply because they buy these goods.
“With regards to the cash flow, if they were to start a business and buy those items at a high cost, they would have to pass on those costs to local consumers.
“And it has bigger impact in that they would be less competitive with established businesses that are better positioned in this situation.
“Everyone cops the costs as the cost factor has to be passed on.”