Stronger dollar brings higher prices |03 August 2010

The euro has weakened since Greece’s economic crisis made many people lose confidence in it, and the US dollar has gained against both the euro and the Seychelles rupee, Central Bank governor Pierre Laporte said yesterday.

He was answering questions at an interview on how changes in the hard currencies could have affected prices of items like fuel.

Mr Laporte said such minor market-driven variations are normal and do not call for the bank to intervene.

The chief executive of the Seychelles Trading Company, Patrick Vel, said prices of a few items sold by the STC went up as the dollar cost more, but most prices stayed as they were. For example, the cost of milk powder went up here as it has risen on the world markets.

He said the STC’s commodity prices are dictated by the cost at source; exchange rates used for the currency the items are bought in; the cost, insurance and freight; and handling costs of those items.

“Since we did our last pricing in April there has been a change in the foreign exchange rate. Previously we bought the dollar for R11.50 but for the last purchase we bought the dollar at around R12.75,” said Mr Vel.

“There has been an increase in the price of milk powder on the world market and the cost of insurance has also gone up, mainly due to piracy.”

He said seasonal changes have affected the prices of items like oranges, onions and apples.

The price of basmati rice has also gone up as India maintains a minimum export price of US $900 per tonne.
But Mr Vel also noted that the prices of most STC items are still lower than in July last year.

He said there were no interviews announcing the changes because the Fair Trading Commission has advised the STC that the method it was using to announce changes in prices was against fair trading law.

The commission took issue with the company’s announcement, which appeared in Seychelles Nation, and said in a press release: “It is the Fair Trading Commission’s opinion that the manner in which the STC published its prices in the Nation of July 26, 2010 has the effect of price fixing.”

An expert who did not wish to be named said it is common practice for suppliers around the world to suggest maximum recommended retail prices, which the commission said is not prohibited even here, except when it has the effect of price fixing.