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CPI Evokes Public Reaction

30 March 2009 1,433 views No Comment

Bandar Seri Begawan – The latest announcement of the drop in food and beverage prices on the Consumer Price Index (CPI) has evoked a response by consumers in the country, who viewed the announcement as unreasonable as prices were still high.

 Retail consumers, including restaurant owners, food manufacturers and the general public, called for further review by the Department of Economic Planning and Development (JPKE) that should include more consumer items.
The review should also include the price of goods against core wholesale prices to ensure transparency.

“Price fluctuation by a few cents is not happy news for us restaurant owners as to increase our prices would certainly mean a loss of customers,” said Ismail, who owns a coffee shop in the capital.
“A review on dairy products including condensed milk should also he included as most drinks require that particular item. Although it is probably not included in international surveys, Brunei has a unique taste. Include that in so we can explain to the customers why we have to increase our prices slightly,” he said.
Othman Timbang, who manufactures food products based on a cottage industrial scale, lamented that the current price hike has nearly diminished his business.

He blamed this partly on the high local manufacturing costs involving high retail prices of commodities excluding subsidised items, the long wait on approval of food products from relevant ministries and also the low financial support from institutions and government for cottage industries.

“SMEs (small and medium enterprises) have been getting quite a number of support these days, hut cottage industries is deemed a very high risk venture, hence the lack of support. How is SME defined from a normal cottage industry? There have been no specific guidelines on differentiating both industries except those drawn up based on financial requirements,” he said.

“High manufacturing costs including the rise in manufacturing goods and the amount of time involved by certain ministries to approve our products is incredulous. To get a kueh (local dry cakes) approved for mass production takes six months. By that time it has lost its glamour,” said Othman.

“On top of that, cooking oil, flour and food preservatives has risen nearly double compared to last year. Is the JPKE actually looking at the figures or just certain types that they consume themselves? Don’t listen to the retail outlets only, listen to the layman who actually consume these items.”

Hjh Azimah Rahimin, a mother of four; scoffed at the idea that inflation was low: find food items were set to be back on track in terms of prices:

“I have six mouths to feed including mine every Single day. Those who say this drop is happening must be in their own imaginary world. Prices are still high even though there are talks on television that world food prices were dropping due to recession. If the market appreciates, food prices go up, if the market goes down, prices in Brunei still goes up. Except for fishes and vegetables, which are seasonable.”

However, contrary to public views, a wholesaler of food items who wished to remain anonymous stated that the high prices of goods could be traced back to international suppliers and also the high cost of bringing in the products. “The tariff of imports is also absorbed within the price of goods.”

“If we lower down our wholesale goods price, which would pay for the tariffs? How will our business survive? The price of oil might influence the products rate, hut the taxes and tariffs do not fluctuate with the markets,” he said.

He added that the retail price of goods is up to the retailers to decide and since there is no cap on prices of some imported goods, the retailers themselves influence the prices. This, he added, might he something for JPKE to look into.

Brunei’s CPI last year rose 2.7 per cent and this year, JPKE has marked a significant decrease during the last quarter of 2008. However, the contractions of some commodities are still above the levels of previous years. The overall CPI for 2007 only expanded at a rate of 0.3 per cent.

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