November 5, 2009

Australia beef sector hit by rising interest rates

Australia's struggling beef industry has suffered another blow as the Reserve Bank decides to increase interest rates.

The quarter of a percent rise puts further upward pressure on the rising Australian dollar. A strong Australian dollar has already negatively affected exports, forcing more beef onto the domestic market.

The beef industry will suffer further if the dollar's trend continues, and exporters and feedlots are probably rethinking their strategies, said Ag Concepts market analyst James Whatley.

The high currency will make prices less attractive, but if there is an improving northern season going forward in the next few months, that will hopefully provide some support and reduce the impact of the currency on the domestic market, he added.