Consumers are advised to spend wisely-Searchlight

2021-12-13 13:48:30 By : Ms. Jane Wang

In February of this year, businessman Leonet Anderson stated that the COVID-19 pandemic is pushing up manufacturing and transportation costs, and consumers should be prepared for price increases. Anderson, the owner of General Hardware Supplies in Arnos Valley, still holds this view, but said on Wednesday this week that the problem is bigger than he expected.  

"I want to say that what is happening now is far beyond what I expected in February," Anderson said on Wednesday's "News Room" show hosted by Chanolde Munroe.  

Anderson and Professor Justin Robinson, Senior Lecturer in Management and Dean of the School of Social Sciences at the University of the West Indies (UWI), are members of the group; and Dr. Jules Ferdinand of the OSV Group.  

The program, a product of Interactive Media Limited, discussed the disruption of the global supply chain and its impact on the cost of living of companies and Saint Vincent and the Grenadines (SVG).  

Anderson said that when he raised price increases and shipping issues in February, it was mainly because he got feedback from suppliers in the United States (US), who said it was because of COVID-19 and that many people were unemployed.  

Anderson said that at the time someone told him that when someone tested positive for COVID-19 in the factory, the entire production facility was closed, must be disinfected and restarted, so the factory was losing a lot of time and workers.  

"Initially due to low production, there was a shortage of goods, but now, especially goods from Eastern countries and Brazil... These prices have more or less doubled, and the supplier’s report and feedback is that there will be no Any progress now, this may continue until the end of 2022," Anderson said.  

He said that it takes three times as long to deliver the goods, and the freight has tripled. 

Professor Justin Robinson said that the global supply chain has been disrupted, and one of the problems is the shortage of containers. 

An online report stated that Chinese ports continue to export large quantities of containerized goods, but almost no imports, which means that containers are only returned in small quantities.  

Professor Robinson said that he believes this is a problem and pointed out that global supply chains are important to island countries, because goods that cannot be produced domestically must be entered by ship or plane.  

He said this means that small island countries like Saint Vincent and the Grenadines (SVG) are vulnerable to attacks during the outage, and the quantity of any cargo is not sufficient to justify special transportation arrangements; in addition, economical Nature means that many commodities do not have domestic substitutes, so the impact of disruption will be greater.

 However, Anderson accused the rise of commodity prices was also driven by something more sinister, that is, large shipping companies' moves to raise prices.  

He said that in some areas, it was about basic supply and demand, but pointed out, “If there is a shortage of workers, why is there a shortage of containers? 

Anderson said that the shortage of workers meant fewer goods were produced, but then people turned around and said that there were not enough containers to carry fewer goods.  

"...As I said, once the goods from the United States and the United Kingdom are produced in these countries, they will not increase or be marginalized..." He pointed out that the charges on smaller international freight routes like Tropical and King Ocean are not steep. Increase, but larger shipping companies that can transport more than 18,000 containers at a time are issuing orders.  

"...You really can't do anything, but it also surpasses COVID.

At the same time, Professor Robinson pointed out that expectations of inflation and price increases have triggered a series of behaviors that will help further push up prices.  

"So you start ordering more orders than usual," and, "When this happens and people stock up, this will increase demand, which will also push up prices."  

Anderson shared that the batch of plywood he ordered in February had arrived last week. He encourages small businesses to purchase goods from the United States and buy in small quantities, because it takes a week for shippers such as Tropical to reach SVG. He also pointed out that people can try to purchase goods in the area, and if they can, local companies can help each other through wholesale sales.     

He also said that business people should consider investing more in fast-developing products.  

"Buy items now and put them on your shelf."

Anderson also believes that people who are currently building houses are experiencing problems due to rising prices, while those who borrowed $300,000 to build houses last year will have problems completing that amount and may need to pay an additional $100,000 to complete the structure. .  

He said that some prices have risen by more than 100% and people's spending has decreased, which is not good for everyone.

At the same time, OSV’s Ferdinand pointed out that the extension of time to pick up goods from China and other places is problematic because the company wants to obtain funds in advance, which means you have to take up a lot of cash. 

"So it will take longer before you liquidate these things; it's so complicated in terms of what's happening now and its impact on the business," Ferdinand said.  

He said that looking to the future, companies should focus on goods that increase cash flow, and shoppers should curb spending by buying only the goods they need.