Financial experts have tipped the New Zealand dollar to perform strongly against the Japanese yen in 2015, presenting potential challenges to the Oceanic nation’s buttercup squash industry.
Of the 19 financial strategists, traders and economists interviewed by New Zealand’s BusinessDesk last week, eight picked the yen to be the weakest currency of New Zealand's major trading partners for the current calendar year.
Japan remains the New Zealand squash industry’s key export market, accounting for almost three quarters of international shipments last season.
“When the exchange rate got to that point where it is now against the yen, people look at their business costs and look for efficiencies,” New Zealand Buttercup Squash Council business manager Matthew Spence told BusinessDesk. “I think most of these guys have got to the point where they have got all the efficiencies that they can to offset any losses they get in the currency market but it is tough, it is real tough, they hurt.”
The 2015 forecast follows an 8.5 percent rise in the cross-rate between the dollar and the yen last year. “The past three seasons have seen quite low returns for New Zealand buttercup squash,” Don Turner, chairman of the New Zealand Buttercup Squash Council, told Asiafruit. “The strong kiwi dollar has made all exporting more difficult and volumes exported in 2014 reduced as a consequence.”
Turner notes that New Zealand suppliers are also facing increased competition in the Japanese market, with Mexico emerging as a strong competitor over New Zealand’s counter seasonal window of opportunity in the Asian nation. However, he is adamant the market remains big enough for both suppliers, with strong demand already ensuing ahead of the upcoming season.
“Our quality continues to impress Japanese consumers, and our continual investment in post harvest technology gives us a better product each year,” Turner said. “New Zealand’s direct shipping links with Japan make the voyage fast, which ensures plenty of shelf life on arrival. Squash is perishable, but ours lasts several weeks after arrival.”