Prices and Pricing
Over the past couple of weeks we have seen a steady depreciation of the Pound against the Euro. The exchange rate has seen a steady decline and has just dropped to its lowest in nearly 12 months and in fact, has dropped much of this in the last week or two.
This volatile movement and uncertainty as a result of the Coronavirus, creates enormous pressures on our business and our employees. In addition to that, all our timber is imported from Europe.
Over the years we have absorbed much of the fluctuation in exchange rates and have also been able to negotiate with timber suppliers due to our increased purchases. However, we have now got to the stage where no amount of increased timber requirements gives us room to manoeuvre with the suppliers, but all price movements are purely based around the currency changes and availability.
Timber prices from Europe have soared by almost 30% in a year, according to newly-released figures in a report from Timber Trade Journal online via the TTF newsletter.
You will be aware that we are not a company that increases prices haphazardly and without serious thought. We have not increased prices for quite some time, and have been more inclined to reduce prices.
It is therefore unfortunate that we are no longer able to sustain low pricing based on the exchange rate and will be need to increase prices if the exchange rate falls below €1.13 / £1.00. This is not an immediate opportunity to raise pricing, but an indication that we are keeping an eye on things.
I trust you understand the problems we are faced with and hope we can continue our favourable relationship.