Pressure on Consumer Goods Sector Intensifies

TEMPO.CO, Jakarta - The profit margin of companies active in the consumer goods sector is expected to erode this year and next year, following the declining trend of rupiah exchange rate that took place in the last couple of months. The reason is that the companies require raw materials, the majority of which are imported and paid for in US dollar. On the other hand, domestic sales are priced in rupiah.

Trust Securities’ Head of Research, Reza Priyambada, expected that those companies, such as food producers, are heavily affected by the declining rupiah. As an example, PT Indofood Sukses Makmur Tbk relies on imported wheat. “When the rupiah exchange rate was still Rp9,700, they spent Rp5 trillion on raw materials. Imagine how much is their current cost must have swelled to?” he said yesterday.  

The rupiah exchange rate has weakened further following the tapering off of the Unites States’ stimulus, in addition to the increased demand for the US dollar by the end of the year, which is caused by matured debts from the private sector. Based on Bank Indonesia’s exchange rate, rupiah was traded at 12,105 per US dollar yesterday.

GALVAN YUDISTIRA | FAIZ NASHRILLAH | ANANDA PUTRI | ABDUL MALIK