The euro plummet - consequences for the agricultural prices
After the surprising detachment of the Swiss franc by the single European currency has accelerated the loss of purchasing power of the euro at a rapid pace. The € has lost more than 15% of its value since may 2014 to mid Jan 2015.
Switzerland is no great weight with respect to the merchandise management, but has significant importance in the financial transfer . The great reputation is more important. Therefore, the decoupling of the Swiss franc by the euro develops an strong signal effect for the assessment of the stability of the euro.
The upcoming election and the uncertain outcome in Greece are possible occasion for the Switzerland. The ongoing currency problem with Greece comes back to the table. It is expected that the European Central Bank will further open the locks of their money with harmful consequences for all those who are bound. The Switzerland wanted to not sit out this risk and took serious consequences of a decoupling in purchase.
How far will stop the decline of the euro, remains open for the time being. Dollar parity is not the speech not only since yesterday. In any case will international trade must reposition. This also applies to the external and import-oriented agriculture.
In principle, there is the rule that a weakening currency more expensive import, while favourable competitive positions arising on the export side.
Important import goods for agriculture are protein feed, rape, maize, fertiliser, energy and food of Mediterranean origin. When measured by the deadline of mid Dec 2014 with a euro exchange rate of 1.25, calculated about a 7% loss of purchasing power of 1 month.
In the case of soybean meal as course protein-FM, a currency-induced price increase of €2 for each dt is to quote. The dollar-quoted price reductions in recent times almost captured on the way. This development is directly on the Chicago soy meal quotes in relation to the Hamburger price observed.
In the fertilizer market prices made a significant Jolt upwards, even if a majority of the purchases is already contractually secured. It dollar recorded falling energy prices are offset by the weak purchasing power of the euro to significant parts.
Favors on the export side are wheat exports, meat exports, with a focus on pork and the sale of milk products in third countries . However you can organize international trade not from now on equal, but it requires the entire logistical processing to the financial return transfers. Also, the provider competition will not stand idly, but develop themselves appropriate activities.
A currency-related competitive advantage from 1 to €1,5 per dt can be calculated for grain export . Moreover, the proximity to major importing countries (Mediterranean countries). However the dollar recording competition moves with their prices heavily down.
The internationally marketable pieces of pork (no fresh meat!) , the currency-related advantage is about 0.10 to €0.15 / kg, if average sales values to €2 per kg. Here, the high transport costs play an aggravating role (to Asia).
Dairy products with its wide scattering worth of cheap whey powder, whole milk powder and butter up to expensive cheese also find competitive advantages. The sales areas are however different. Algeria and the Middle East as a major transport-related sales regions in question are for milk powder. Russia is down for other products, so that Asia - especially China - sets the orientation.
NET Germany imported more agricultural products than it exports . High import demand arises mainly from the fruit and the protein feed. Germany comes directly after the United States in second or third place in the world rankings. The German trade share in the globally traded agricultural goods moving between 5% and 7%.
