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The Weak Leu Weakens The Imports Market
The local currency loss of value compared with the Euro makes for more expensive imports. This was immediately shown in the 10% higher price tag of merchandise at the Eco-Healing store in down town Bucharest.
The store imports its merchandise on a weekly basis, and pays in Euro, hence all jumps and jitters in the exchange rate are immediately shown in the books, said store manager Dana Raileanu.
At the Pukka Food store not all merchandise had the price hiked, as much of it was imported last year. "We will halt new imports as everybody is scared by the economic crisis and is in a stand-by mode. Hence, we do not want to burry our funds in merchandise people won't buy, thus putting ourselves out of business," said manager Bogdana Ghinescu. She explained that a 25% hike in prices was to be expected, after the exchange rate to the Euro jumped from 3.7 lei to 4.5 lei.
The Ministry of Agriculture adviser for ecol-friendly farming Teodora Aldescu said she expected a 20% to 30% hike of eco-produce in 2009. However, she assessed there will be no serious fall in sales volume, if the communication campaigns regarding the added benefits of eco-products would succeed.
Ghinescu agrees. She says that people with incomes above average will maybe keep from buying new yachts or cars, but will still eat and indulge in more affordable expenses like cosmetics or foods free of chemicals. "Last year, when we opened the store, was a good year for such produces, but I still see around a lot of people with money, so we should do good."
So far, Romania's eco-produce market is supplied with imported products. The crops on the 220,000 hectares which are grown domestically, clean of chemicals, are not processed in Romania, but sold as raw material abroad.
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