Date
20 September 2017
Stanley Lau says lower oil prices are undermining the purchasing power of crude producing or exporting countries. Photo: HKEJ
Stanley Lau says lower oil prices are undermining the purchasing power of crude producing or exporting countries. Photo: HKEJ

Benefits of falling oil prices take time to be felt

Falling oil prices will benefit an array of sectors but the real effects will not be felt for another three to four months, the Hong Kong Economic Journal reported Monday.

Many manufacturers will see lower raw material costs and cheaper electricity if oil prices remain at present levels, Eddy Li, president of the Chinese Manufacturers’ Association of Hong Kong, said.

Stanley Lau, chairman of the Federation of Hong Kong Industries, said although transport costs might be falling, lower oil prices are undermining the purchasing power of crude producing or exporting countries and regions such as Russia, the Middle East and Venezuela.

Hong Kong, the world’s second largest toys exporter, could expect a boost to toy makers such as Jetta Co. Ltd. and Shing Hing Plastic Manufacturing Ltd.

Acrylonitrile butadiene styrene, a common thermoplastic polymer used in toys, has fallen to US$1,600 from US$1,900 last year.

However, the benefits vary as some contracts are free on board, in which case buyers pay for transport costs.

Airlines will also benefit from lower fuel costs although there may be some time lag.

Cathay Pacific Airways Ltd. (00293.HK) said the fuel surcharge may adjusted.

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VW/JP/RA

Freelance journalist

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