The fresh produce sector is keeping a watchful eye on a strengthening in the values of sterling and the euro against the dollar as well as tough situations for key southern hemisphere currencies.
Chilean exporters are reported to be "horrified" by what is happening to their own currency according to one importer. The peso has appreciated by more than 20 per cent in the last 12 months against the dollar. Although Chileans' gross dollar export earnings from sales in Europe are higher than a year ago once euros have been converted into dollars, the Chilean peso's has strengthening against the dollar means production costs have effectively risen. "They are certainly complaining about the situation," said the Journal's source.
And although the rand has depreciated slightly since last month the South African currency is still 15 per cent stronger against sterling than last year and 8.5 per cent stronger against the euro.
What senders therefore need is bullish retail pricing in Europe. "But there is very little hope of persuading the supermarkets that growers need a better result this year," warned one supplier to the multiples.
The grape market is therefore going to be one to watch as South African supplies are running slightly late and there is a bigger crop this season than last. Chile is also showing signs that an early start is in the offing, so a difficult currency situation could be compounded by a clash on the marketplace between the two sources and a softening of prices over the coming weeks.
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