Lack of foreign exchange crippling businesses
Staff cuts looming due to shortage
Less goods in supermarkets
The lack of foreign exchange remains constricting to operations within the business community.
Businesses across the spectrum said they have either reduced the amount of goods being brought into the country or they are turning to cheaper markets to source goods.
They have also bitterly complained that the time it takes for forex to be released from the local banks remains too lengthy, putting additional financial strain on their businesses.
Rajiv Diptee, president of the Supermarket Association of T&T, noted that this sector, being at the end of a value chain, has been particularly hard hit. Added to this is shipping costs which have sky rocketed and which contributed to the increased cost of importing goods.
“For this month alone we have seen a number of price increases from our suppliers and distributors and they have indicated in no uncertain terms that these are due to various challenges including the lack of foreign exchange being chief among them.
“They also have the challenges with their foreign suppliers and the strain on their credit relationships they have with them,” Diptee explained.
He said there have also been a number of products in various categories which have disappeared from the supermarket shelves.
The is due to either lack of availability as the COVID-19 pandemic has also negatively impacted production at factories world-wide or simply because there is no foreign exchange to buy these goods.
“Also grain prices have sky-rocketed internationally so there has been a strain on international producers of meat,” Diptee noted.
He said in instances where prices are deemed to be “prohibitive to customers” importers would not take those products, adding that suppliers are now shopping “all over the world” to source goods at a reasonable price that customers can afford.
“If they had supply chains coming out of Latin and Central America they are going as far as India now looking for deals because they have to access goods and every body is facing a real challenge to stay in business because suppliers and distributors need foreign exchange to buy goods,” Diptee noted.
He said feedback from some of his members, mostly from SMEs, indicate that they might go out of business as the lines of credit are not there any more.
And ultimately this can also result in loss of jobs.
“We don’t just have concerns for customers but we have concerns for the entire industry right now,” Diptee added.
He also called on relevant authorities to tell the country what really is the plan for address the forex crisis moving forward.
Even Euros difficult to source
Ramesh Maharaj, general manager, of Ven Caribbean Paper Products said his business also continues to be badly affected by the foreign exchange crisis.
He said even “minuscule amounts” of forex is challenging to obtain from the banks.
“Sometimes I need 3,000 Euros from the bank to send for parts to maintain the plant and for weeks even into months I can’t get it. In one instance the bank took nearly four weeks to send it out
“All this time we have no choice but to wait because we have to get the part from Italy and they will not ship it until they get payment,” Maharaj said.
He noted that such parts are not available locally and around every other month his business needs to upgrade its equipment.
Coupled with this, Maharaj added, shipping lines have mandated that all charges must be paid in foreign exchange which is a further strain. Maharaj explained that when a business requests the foreign exchange for the bank that is then placed in a queue.
“You can’t do anything but to wait,” Maharaj said.
However, because Ven Caribbean is into exports it gets US currency which then enables the entity to remain afloat. But Maharaj said with the crunch it means his reserves continue to deplete.
“Even the local manufacturer which is a mill which we get most of our raw materials from they sell in US dollars. I don’t know how that works out but they said they have to pay for their raw materials in US dollars so we need to pay them in US,” Maharaj said.
He said the business has been able to work with the best possible solutions to keep it going as it employs 100 people.
“We don’t want to send them home but at some stage if this continues we are going to be in a hole,” Maharaj added.
Spectacles industry also affected
Lauren Robinson, of the T&T Optometrists Association said the forex crunch is also affecting the importation of much needed items and ensure businesses continuity.
She explained that optometric equipment such as spectacles frames, cases, specialised cleaning solutions, the optical lab equipment, contact lenses and the contact lens solutions are all imported.
“None of these items or the raw materials nor equipment is manufactured in T&T. The latest announcement by Republic Bank re the further reduction in the foreign currency on credit card will of course negatively impact our industry.
“This will lead to the difficulty in supplying our patients with spectacles,” Robinson said.
Former president Nigel St Rose who also owns Island Eyes Ltd said the lack of foreign exchange has been crippling.
He described the last year in particular, as difficult.
“I have to request US funds to pay a critical supplier who comes out of China and that supplier cannot take credit card transactions so I must have US funds to pay.
“Without access to US this really puts a damper on my business because without that supplier I cannot get critical items like lenses,” St Rose explained.
He said in some instances when requests are made to the local banks for forex there’s no response from these institutions. This results in payment times being extended which then literally halts the operations of the business, St Rose added.
“You literally cannot pay suppliers, cannot get products at a reasonable time and everything is delayed. I actually had to go outside my bank I regularly do business with to go get foreign exchange and that helped us for a couple of months but going forward we are facing the same situation,” St Rose said.
He said if the situation continues, he may have to switch to more expensive suppliers.
But this cost will eventually be passed onto patients which St Rose is trying to avoid.