Tuesday, May 15, 2007

Everything Increase - WHAT 4?

This seems to be a domino reaction. It began with manufacturers who had to bear more of the costs. As such, prices for F&B - food and beverage has been increased by approximately 20 cents everywhere. In the coffee shop in front of my house, the price for a cold Milo O has been increased to $1.90 compared to $1.70 previously.

Because of the facts above, retailers had to adjust the price of consumer items with of course justification. In a recent article, Dutch Lady Malaysia chief, Mr. Cees Ruygrok mentioned the following:

“The raw material prices have increased drastically. Unfortunately, we have not been able to increase prices by 15 per cent. We have increased our prices by 3 per cent,” managing director Cees HM Ruygrok told a press conference in Kuala Lumpur yesterday after a prize presentation ceremony of its “Dutch Lady Bersedia Untuk Menang Contest”.

“Dutch Lady has not been able to recoup the price increase. We have to grow our way out of it,” Ruygrok said, adding that the company’s collective agreement is up for renewal, which will also add to the increase in overhead costs.

Reason: raw materials including palm oil and petrol.

Source: click here

Items affected by the increase: sardines, Milo, Nescafe, condensed and evaporated milk, garlic, onion. Also, the price of standard flour - used for bread and our favorite Chinese Dim Sum has been increased by 15 cents - manufacturers wanted increase by 50 cents.

Expect our bakery items and even dough-base items to be increasing in the coming weeks.


Very Simple! Increase The Value of RINGGIT VS DOLLAR.

The current value of the ringgit has improved tremendously since last year. Following the removal of the ringgit peg against the dollar, the value has increased by 4.2 percent since last year. As of today it is at 3.73 percent.

Not good enough. The current value is at 3.40:1 as of today. It is best that if the ringgit reaches it's mid-line in order to achieve the equilibrium. As before the 1997 Asian Financial Crisis, the value of the ringgit is at 2.50:1. Since the peg value is at 3.80:1 before July 2005, therefore, the equilibrium rate is at 3.15:1. In the mid-term, having it at 3.15:1 could reduce the import costs for all items that Malaysia imports including raw materials, electronics and etc..which gives importers and exporters a win-win situation.

The fact that the ringgit's strength does not affect the government is good news but the question is that how soon can it reach the equilibrium. The sooner it achieves the rate, the better - and it affects everything. We don't have to pay that much to get something.

It is said that the momentum of the ringgit going higher against the Dollar is depending on the condition of the stock market and the amount of funds going in. Of course there is bank intervention and then technical corrections (profit takings) as a breather. But to encourage more, the government should cut the tax rate, either lowering the corporate tax to 22 percent or merging the government and service tax (15 percent) into a GST 5%. After all, we are trying to get more foreign investors coming aren't we?

Sack Wolfowitz!

Reuters has reported that the BOD of World Bank is deliberating on the position of former Pentagon #2 Paul Wolfowitz as the president of the Bank. The reports are clear that Wolfowitz had broken the rules to secure the personal interests which involves raising the salary of a partner of his.

In this saga, the US has been begging the G7 to provide support to save Wolfowitz from the sack. But the fact that Wolfowitz was responsible together with Rumsfeld in instrumenting the Iraq invasion in 2003 means that it is definitely part of the hegemony plan -as Chomsky says - part of the US' quest for world domination. Imagine if the numbers of people on behalf of the US leading an international organization diminish, what will happen to them? PING!

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