14/06/2011 (Myanmar Times) - While the falling exchange value of the dollar is grim news for exporters, it’s creating a difficult environment for importers as well.

They say that while the market is awash with dollars and export credits, which they require when importing goods, quick profits are by no means assured because consumer spending is down and it’s unclear where exchange rates will stabilise.

“For the time being, the US dollar exchange rate is down and we’re not selling much. As a result we dare not import any more goods because we expect the dollar will continue falling,” said Ma May Phyu Thwe, the director of a Toshiba-branded electronics shop in Mingalar Taung Nyunt township.

She added that imports paid for when the exchange rate was higher are now overpriced and difficult to shift.

“The electronics that we bought when the exchange rate was higher we can no longer sell in dollars – everything is now being sold in kyats,” she said.

“Normally when the exchange rate falls, the price of imported goods follows soon after but we’re in a position where we can’t cut prices too much because wages and our other operating costs must be paid in kyat, regardless of our sales,” she said.

However, she said if the dollar continues to fall, the company will lower prices further.

“We have to generate cash flow and we’ll have no choice but to lower our prices if our competitors do the same thing,” she said.

Like nearly everybody involved in business in Yangon, Ma May Phyu Thwe said the dollar’s decline has been on her mind a lot. “I’ve spent a lot of time recently discussing this topic,” she said.

Ko Htay Aung, the owner of a retail electronics shop in Kyauktada township, said imported electronics prices have not fallen significantly yet.

“Nobody really knows where the exchange rate will fall to but if I imports goods and now it goes down to K500, I’ll lose lots of money,” he said.

Ma Nan Tin, a Thai foodstuffs wholesaler at Mingalar Market, said imported commodities had dropped in price by about 10 percent in the past month.

“There are no shortages of foodstuffs and we’re able to import just about all the commodities we want.

“I’d say average prices have fallen by up to 10pc but there has not been any change in demand. If demand picked up I’d be inclined to import a lot more, which would allow me to lower my prices further,” she said.

U Aung Than Oo, a vice chairman of the Myanmar Rice and Paddy Traders Association who exports rice and also imports palm oil through his trading company, said he would counter a fall-off in exports by focusing on imports.

“If the dollar price is down we can switch our attention to importing palm oil.”

He said export credits, which are required to import goods, were widely available and the current situation provided a good opportunity for importers.

U Htun Lwin, who imports and sells palm oil through Shweme Company, said: “We will plan for the long-term depending on what we see as the market’s needs, and how commodity prices are affected by international demand and exchange rates.”

The City Mart chain of supermarkets last week posted a notice at its stores stating that prices of imported goods had been reduced prices in response to the reduced value of the US dollar domestically.