September 25, 2008
National Farmers' Federation Vice-President Charles Burke said on Thursday, 18 September 2008, the depreciation of the Australian dollar during in mid-July has provided some comfort and improved competitiveness of farm products' exporters.
Despite a rebound from US$0.7804 on Sept 17, the Australian currency was US$0.839 at 0215 GMT and this remains well below its peak on July 15 of US$0.9849, putting Australian agricultural exporters' minds at ease as they reap better returns from offshore sales. Farmers were exposed when the Australian currency pushed towards parity with the US dollar, but the relief now is palpable.
Burke said in a statement that with the winter harvest fast approaching and the firming up of production levels, grain growers will be particularly pleased with the lower dollar as they look forward to the potential for locking in prices for their grain, linked to the new dollar rates.
Westpac Banking Corp.'s senior agribusiness economist, Andrew Hanlan, said the weaker Australian currency is offsetting the effects of easing global commodity prices, but it's also elevating the price of imported farm inputs such as oil and fertilizer.
Fortunately, the price of crude oil has fallen, with New York Mercantile Exchange or Nymex. Crude oil quoted at US$105.85 a barrel in November has seen a vast drop compared to US$145 and above for a barrel in early July.
Hanlan said in a joint statement with Burke on the issue of the monthly NFF-Westpac commodity index for August that the weakening of the Australian currency has had an impact on farm inputs, making it less pronounced.
In Australian dollar terms, the overall index rose 5.2percent in August to 145, up 3.1percent for the year.
In US dollar terms, the overall index fell 3.3percent in August to 188, but was still up 10 percent for the year.
