Chilean growers’ organisation Fedefruta has called on the country’s Central Bank to intervene and halt the fall of the US dollar against the Chilean peso on the eve of the new export season.
Fedefruta president Cristián Allendes met last week with Central Bank governor Rodrigo Vergara to discuss the downward pressure on the dollar over the last two months. The meeting lasted an hour and afterwards Allendes said: “Over the course of the year the rate of exchange has fallen by nine per cent and for the fruit industry this translates to a loss in dollars of some $400 million… We are very worried but the authorities do not seem to be similarly concerned, despite the fact that the fruit industry generates a lot of work - some 450,000 jobs - especially at regional level.”
Allendes believes that with inflation under control and fiscal strength in Chile it is important for the bank to act. He said: “Now is a good time for the Central Bank to buy currency, intervene in the market and build up reserves, just as renowned economists have suggested. The Central Bank did not commit to anything, but nor did they say that they are closed to the possibility if external and internal factors change, so we do have some hope.”
Fedefruta calculates that in the fruit sector 60 per cent of costs are in pesos, principally labour which has risen considerably. There is therefore a dichotomy for between rising costs and a falling dollar especially with export earnings largely in dollars. Allendes said: “Also investments in our sector are long term and it is very hard to reinvest without knowing where the exchange rate will be going over the next few years.”
