GOING BUST? Why bra makers are feeling the squeeze

As inflation begins to take hold in Asia, a local bra maker is among the companies counting the cost.

Top Form Bras, which has factories in Cambodia, China and Thailand, has seen input prices jump for the 20 or so components it needs for manufacturing.

Those items include things like fabric, metal wire, plastic adjusters and foam pads.

Kenneth Wong, who runs the Hong Kong-based company company founded by his father, says that prices are still rising as we speak.

This means he can no longer confidently quote clients a fixed price that would last the product’s life cycle and is instead updating prices week to week.

“Previously when I was buying things like elastic or thread or buckles, we didn’t even need to think about it,” Wong said.

“But now, you really need to manage it.”

It comes as rising inflation across Asia starts to weigh heavily on the region’s economies.

Markets are starting to price in expectations of rising inflation and an aggressive response from central banks.

S&P Global Ratings expects that in regions where inflation already exceeds targets, or which are vulnerable to capital flight, central banks will be forced to raise interest rates.

“Asia-Pacific’s monetary policymakers will face difficult trade-offs this year,” said Louis Kuijs, S&P Global Ratings’ Asia-Pacific chief economist.

“The Russia-Ukraine conflict is adding to global inflation by raising the cost of energy and other raw commodities.

“An increasingly hawkish U.S. Fed is tightening its policies, and most recently signalled it would radically reduce its balance sheet.”

S&P says the U.S. Fed’s policy tightening raises the potential for capital outflows from Asia’s emerging markets, hitting regional currencies.

“Our assessment suggests that some Asian emerging markets could be vulnerable to capital flight this year, mainly due to significant external deficits amid higher energy prices and elevated fiscal deficits and debts,” the agency said.

“Several central banks in Asia-Pacific will be forced to tighten,” said Mr. Kuijs.

“The prospect for rate rises varies sharply. The prospect for inflation does not–every region will see higher prices.”