Common domestic appliances could soon rise by as much as 30% for consumers in Malta due to international market movements, PN chief spokesperson Peter Agius has warned.
During a recent interview on Lovin Daily about the country’s current supply chain problems, Agius referred to hikes in the price of steel, largely due to soaring energy prices.
“Steel went up by 70% in the last few months alone and there have been quite a few indicators showing that inflation will be beyond what is normally expected, which is squeezing our families,” he said.
“Steel-made appliances require raw materials and some are saying that the prices of fridges and washing machines will rise by 30% over the next few weeks. With Malta having a sizeable chunk of the population, around 70,000 people, at risk of poverty, this can have a dramatic effect on them and all of us.”
Besides the prices of raw materials, Malta is facing a blow as a result of significant international shipping costs.
As Agius explained, Maltese manufacturers must import most of their raw materials by sea.
“People in the industry say that that containers they used to import from China or the Far East for €500 to €600 now costs €6,000, more than ten times as much. It’s having as significant impact on all manufacturers in Malta.”
Manufacturers are then faced with the same problem all over again when exporting the final product overseas, with shipping prices rendering them hugely uncompetitive.
“If Maltese manufacturers competing against enterprises in South Italy, Turkey, Germany or France, it means they’re competing against companies who have access to a rail network and the most developed road networks.”
“While competitors can send their products all around Europe through alternative means, Malta has no option but the sea to reach our customers and to get our raw materials.”
“It’s having a big impact on manufacturing and the world of politics needs to see to this with immediate effect.”
The PN recently proposed a €40 million rescue fund for importers and exporters, arguing that the European Commission could agree to this due to Malta’s double insularity problems.
“The EU has a specific article in its treaties which specifically recognises the challenges of insulated territories and regions,” Agius said. “EU legislation gives us the tools to help Maltese companies make the pitch.”
Energy and Enterprise Minister Miriam Dalli has played down this proposal, arguing that problems within the logistics industry cannot be solved just by pumping public funds into the industry.
However, Agius urged the government to view this aid as a short-term ‘rescue’ plan for the industry, similar to the wage supplements and establishment vouchers that were introduced during the COVID-19 pandemic.
Indeed, he warned that all three main pillars of Malta’s economy are under huge duress – tourism as a result of the pandemic, financial services as a result of greylisting and manufacturing as a result of this market movements.
“We need to set up a rescue fund to ensure the industry weathers this period and then we can take measures as we go along. It’s quite disappointing that government isn’t engage with this idea.”
Have you noticed a price hike in certain items in recent months?