The Georgetown Chamber of Commerce and Industry (GCCI) has warned that there will be significant shortages and even unavailability of items leading into the Christmas season and the first quarter of 2022.
“It has been identified that there are going to be issues and shortages. Some of our manufacturers are having issues with raw material supplies based on back-order shipping. So there is definitely going to be at least a slowdown and unavailability of some items heading into the Christmas season and at least into the first quarter of next year,” GCCI’s President Timothy Tucker told Stabroek News yesterday during a telephone interview.
Last month, this newspaper reported that major shipping ports in the United States and the United Kingdom are clogged and this has further contributed to the disruption of the global supply chain. The global supply chain was severely disrupted in 2020 following the intensification of the rapidly spreading COVID-19 pandemic.
Manufacturing fell sharply and now that the world is returning to some normalcy, there has been increased demand for products and the various industries are battling to meet those demands. How-ever, labour shortages leading to delayed manufacturing and clogging of the various ports are proving to be a nightmare for the world’s economy.
Global experts have predicted that shipping woes are expected to run until mid-2022 resulting in increased shortages and even more inflation. According to a CNBC report, the US consumer price index jumped 6.2% in October from a year ago representing the sharpest annual rise for 30 years while the Chinese producer price index inflation surged 13.5% in October.
Tucker told Stabroek News that the Chamber has scheduled a webinar for its members at which they intend to discuss all the issues relating to inflation and the global supply chain crisis.
On Friday, in an address to the nation, President Irfaan Ali had said that the global supply chain has shocked economies across the world but committed his government’s support for programmes to cushion the effect on Guyanese.
“One of the important measures is to have more local consumption, because if the supply chain is not delivering in a timely manner, and is delivering at a price that is not affordable, then you have to create more programmes, give more incentives to increase local production,” Ali had said.
He added that his government has not been sitting down, rather they have been working on coming up with plans to improve the standard of living in Guyana. He had alluded to a slew of relief measures that that had been implemented already by the government.
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As part of the relief measures the Ali-led government announced was the reverting of freight charges to pre-pandemic levels in order to lower taxes on imports, thereby relieving consumers of higher prices that have been passed on due to higher shipping costs. He had said that the Customs Act and the Value Added Tax Act will be amended to reflect the concession, which is effective on all invoices dated August 1 and continues until January 31, 2022.
The President had said that his government recognised the hardships faced by the Guyanese people as well as the steep increase in the shipping costs which moved from an average of US$2,500 to as much as US$15,000 per 20-foot container and from US$3,500 to over US$20,000 per 40-foot container.
“This measure will allow for a saving of $4.8 billion to the consumer and business community over the six-month period, thereby reducing revenue collections by a similar amount of $4.8 billion,” a statement from the Office of the President had explained.
Late last month, Tucker told this newspaper that GCCI has been monitoring the rapid rise in commodity prices across the world and had written to Finance Minister Dr Ashni Singh seeking some “leeway” for those members who have to honour government contracts and are being affected by the shipping delays. Additionally, he related that they were also seeking to have the commencement period for the reduction of freight charges brought to April 1 instead of August.
“We had asked, in order for the people to feel the benefits immediately, if the government would accept invoices from April 1. We have not gotten a response and nothing has happened and now we are three months down the road…,” he said yesterday.
Tucker added that they intend to follow up with the Minister to figure out what is the position on the letter that was sent.
“We have not gotten a response from Minister and that was three months ago. Members have been recently complaining about the non-acceptance of that waiver to less than a container load of shipping. So that is what members are concerned about because none of those benefits would have been shared with the smaller businesses that bring less than a container and that’s unfortunate.
“Now we are dealing with different issues we are probably going to have to write the government for an extension (of the pre-pandemic freight charges) of that waiver since the shipping woes continue and it is pegged to continue beyond the first quarter of next year,” he added.
