With the ringgit falling off the cliff, importers are feeling the heat and sooner or later have to passed on higher prices to consumers and this may have a detrimental impact on sales. Trendcell, the operator of premium supermarket chain Jaya Grocer in Malaysia, has announced a “substantial” price hike “on all US brands of imported products” including spreads, drinks and cereals.
As the ringgit is still holding up well against the euro and Australian dollar, companies are less pressured to increase prices on imports from the European Union and Australia. However, this is not the same for imported products from the US (see details below), China (food and non-food), the UK (foodstuff) and South Korea (foodstuff and cosmetics).
Now, a closer look at what Malaysia imports from the US to see what will be impacted by the rise in the US currency. Food and kindred products (USD 219.7 million) will be impacted the most, followed by agricultural products (USD 200.8 million). The implication from the weakening ringgit for importers is they will have to look for other cheaper sources of products and the key beneficiaries will likely to be Australia and New Zealand, which have the advantage in tariff and geographical proximity.