Retailers plan to lower prices in wake of stronger rupiah

JAKARTA (JP): Retailers will lower the prices of imported goods on sale in their stores over the next two or three months as a result of the rupiah's strengthening against the U.S dollar, a senior executive of the Association of Indonesian Retailers (Aprindo) said on Wednesday.

Aprindo's executive director Kustarjono Prodjolalito said that department stores and supermarkets would start lowering their prices once existing stocks, which were imported based on the weaker exchange rate, had been cleared.

"We're sure that prices will go down in two or three months," he told The Jakarta Post on the sidelines of a seminar here.

But he could not provide details, saying that Aprindo was still making the necessary calculations.

The rupiah began to strengthen after the election of President Megawati Soekarnoputri on July 23.

On Wednesday, the rupiah closed at Rp 8,750 per dollar, compared to more than Rp 11,000 before the election of Megawati.

Meanwhile, Thomas Dharmawan, executive director of the Indonesian Food and Beverages Association (Gapmmi) also confirmed that the prices of imported goods would decline in the wake of the strengthening of the local unit, noting that the prices of some goods had already started to drop.

According to Thomas, the prices of imported goods such as baby milk, canned fruit and meat, biscuits, and chocolate products would all decline within the next month.

Thomas also said that local manufactured goods which contained imported raw materials, including fermented soybean, tofu, instant noodles, and baby porridge might need between three and six months before becoming cheaper as local producers would need a longer time to adjust their prices in line with their operating costs.

"But I see that many supermarkets are selling some imported goods at lower than last month's prices," he told the Post.

At present, imported vegetables, fruit and yogurt were being sold cheaper than last month, Thomas said.

For example, he said, imported apples were now being sold for between Rp 8,000 and Rp 9,000 per kilogram, down from between Rp 13,000 and Rp 15,000 per kilogram last month.

Prices of agricultural products such as sugar, soybeans and peas had also dropped, he said, pointing out that sugar had declined to Rp 3,600 per kilogram compared to Rp 4,200 in July.

"This is all good news for consumers as they will now benefit from lower prices," Thomas said.

At the seminar, Kustarjono said that the association had issued a circular to its members to only accept imported goods which were registered with the BPOM food and drugs control agency, and labeled in the Indonesian language.

"We don't want to endanger consumers with unregistered imported goods," he said, adding that retailers who persisted in selling unregistered imported goods ought to be held liable for their actions.

According to BPOM, at the present time about 310 unregistered imported products are being sold on the domestic market.(05)