4-8-2023 (SINGAPORE) Policy measures aimed at curbing higher inflation, such as appreciating the Singapore dollar, are beginning to show their impact in the market. Importers have reported that it is now nearly 15 per cent cheaper for them to purchase products from overseas.
Despite these cost savings, consumers are not yet reaping the benefits, as rising transport and labor costs continue to put pressure on businesses’ bottom lines, importers told CNA.
One area where the effects of a stronger Singapore dollar are evident is in specialty shops like the Japanese supermarket, Iroha International. With the increased purchasing power from the stronger currency, Iroha International can sell certain products, such as coffee, for at least two dollars less than local supermarkets.
Mr. Hayato Yaegashi, director of Iroha International, highlighted that some bottled beverages have become cheaper, with prices falling about five to 10 per cent. However, some shoppers still feel that the savings are not substantial. They find appeal in the quality and authenticity of products available at specialty stores like Iroha International, even if the prices may not be significantly lower.
While the cost savings are not directly benefiting consumers, they do provide a bit of relief to businesses. For instance, online butcher The Meat Club, which imports produce from countries like Australia and New Zealand, finds some relief in the stronger Singapore dollar. However, it has not resulted in lower prices for customers. CEO Brad Ross pointed out that other cost factors such as rising labor, operating, and freight costs offset the currency difference.
Despite the current challenges, there are indications of better times ahead for businesses. Headline and core inflation eased last month, and authorities are hopeful for a moderation in the second half of the year. However, businesses are still grappling with various cost pressures, making it challenging to pass on the currency-related savings to consumers.
