KUCHING: The ringgit eased 0.1 per cent to 3.8140 per dollar, its weakest since September 1998, as weak commodity prices added to concerns over Malaysia’s sluggish exports.
The Malaysian currency was pegged at 3.8000 between 1998 and 2005.
Business sectors including the wood-based industry in Sarawak are not spared from the impacts of the current depreciation in ringgit. Chairman of Sarawak Timber Association Datuk Wong Kie Yik, said although traders of timber and timber products earned higher export revenue, at the same time they also incurred higher expenses due to the high exchange rates.
Despite the current situation, he hoped that the business for timber and timber products would proceed as usual. Describing the current economic situation as worrying, Sarawak Furniture Industry Association president Lai Kim Min said everyone had been affected.
“We are at disadvantage due to soaring expenses. Today, even products from China which were known for their affordable prices are also becoming more expensive. Apparently, the depreciation in ringgit poses adverse impact on the industry. This is because the industry relies heavily on imported materials and fabrics. Our cost of input is high because we pay in US dollars. Hence, whatever we gain in ringgit we also lose in cost of input. Presently, our exports are not growing steadily. This situation poses direct adverse impacts on end-users due to escalating cost of finished products. The situation also hampers the business because it is becoming more difficult to market the products when consumers’ purchasing power becomes weaker. If this situation persists, everyone will suffer in the long run,” he said.
Sarawak Bumiputra Furniture Association chairman Bahaman Sulaiman concurred, saying that the current economic situation is very bad and the market is slowing down.
“With six per cent GST, prices of materials have also increased. By the time the products reach end-users, the prices would increase by 12 per cent.
“Ultimately, end-users stand to lose. Amid this challenging time, industry players and the government alike must strategise and find ways to stabilise the market. It is hoped that the government would create new business and employment opportunities for the people to strengthen purchasing power and to cope with spiralling cost of living,” he added.
“Although we gain in export revenue due to foreign exchange, at the same time we also incur high cost because we rely on raw materials from other companies. Presently, some of these companies have either shut down or reduced production due to shortage of raw materials. This is because these companies also depend on imported materials like adhesive and spare-parts. Hence, we are paying higher cost due to spiralling prices of imported materials,” said Green Pellet Sendirian Berhad director Dato Ngieng Ping Wei.
Sarawak Timber Industry Development Corporation is deeply concerned about this situation and takes this opportunity to advise industry players to embark on innovation in ensuring that the industry remains resilient.