Cut price! - Wisynco boss pleads with colleagues to pass on appreciation benefits to consumers
Former President of the Private Sector Organisation of Jamaica (PSOJ) William Mahfood has questioned why businesses are not cutting prices on consumer goods in the wake of the appreciation of the Jamaican dollar.
Mahfood, who is also chairman of the Wisynco Group, made reference to the move of his company to chop prices by three per cent in October last year as the dollar gained value against the US dollar, driving down the input cost on raw material for most industries.
But prices on consumer items have not, for the most part, dipped to align with the exchange rate adjustment.
"There is no reason why other businesses should not cut their costs, because they would have implemented the same pricing mechanism [as Wisynco]. We have seen the input cost going down because of the appreciation in the dollar.
"Why have other companies not done it (cut prices)? Consumers have paid the prices for far too long, and they should benefit from the [appreciation of the dollar]," Mahfood argued.
He was speaking at a policy discussion forum themed 'The End of Devaluation? The Implication for Businesses and the Economy of Jamaica's New Exchange Rate Landscape' at the University of the West Indies, Mona Campus, on Tuesday, where he admitted that his company had pegged prices at J$134 to US$1 in anticipation of continued depreciation of the currency, though the rate has never passed J$132 to US$1.
This, he said, was also to facilitate credit payment which would be deferred, but he was quick to point out that consumers felt the pinch through such a mechanism.
Now, however, the Wisynco boss has lauded the stability of the exchange rate in recent times, and has contended that there is no incentive to hold excess money in US currency as the local currency continues to strengthen against the greenback.
In fact, Mahfood openly admitted that Wisynco's losses amounted to more than $76 million because of the upward trend of the Jamaican dollar against the US dollar, also pointing out that others would have suffered the same fate.
"We realised that it was no longer beneficial to keep much of the US dollar, and we were discouraged to do away with speculation," the Wisynco boss stated.
The former PSOJ president further contended that the stability in the exchange rate was as a result of the high confidence in the Jamaican economy and the perception within the business community that there is stability in the macroeconomic environment.