An anticipated strengthening of currency rates in a number of key Southern Hemisphere nations supplying fresh produce to the European Union is likely to provide growers and exporters in those countries with a major headache as their overseas sales campaigns get underway in 2011.
That was the grim forecast being made by a number of industry commentators as the New Year approached.
Writing exclusively for Eurofruit Magazine, Kölla Hamburg’s Herbert Scholdei predicted that overseas trade in particular stood to suffer as a result of the expected revaluation of currencies in countries like South Africa, New Zealand, Argentina, Brazil and Chile.
“All these currencies are strengthening and suppliers there are going to see sales prices in import countries that will make it hard for them to cover their costs,” Mr Scholdei said.
“This is because these countries depend to varying degrees on commodity exports like ore and copper which are increasing in value, flooding the economy with money and thus boosting the value of their currencies.”
Chris Redfern, a senior dealer at foreign exchange specialist Moneycorp, pointed to the New Zealand dollar as an example of a resilient supplier-country currency which was set to strengthen further during the coming months.
“Although the New Zealand economy has struggled recently, it is likely that inflation will rise next year as a result of tax increases, among other things. That upward pressure on inflation will mean higher interest rates and, probably, a stronger NZ dollar,” he commented.
Henri Lambriex, managing director of leading importer Westfalia EU, agreed that coping with shifting currency exchange rates would be difficult and that navigating stormy international waters to reach international markets was the major challenge facing the South African industry.
“The ‘currency war’ has resulted in our currency significantly appreciating, which forces us to look at ways to improve the efficiencies of our business,” he said. “The currency situation focuses the mind. We need to accept the current exchange levels and become even more efficient in what we do to continue developing successfully our global position.”
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