Tumbling euro offers hope for food exporters
Processors to benefit if new value holds
Published 18/05/2010 | 05:00
Irish food companies stand to benefit from the uncertainty on financial markets as the euro's value remains volatile. The euro has fallen back to an equivalent of 85p sterling, a drop of 10pc compared to recent highs, and some financial commentators say it could fall further.
The exchange rate movements will give Irish food exporters a major competitive advantage in their most important market.
Britain takes close to 45pc of all Irish food and drink exports. More than half of Irish beef exports are sold on the British market, while 40pc of foreign dairy sales and two-thirds of prepared foods go into the sterling area.
Although the euro's value against sterling has fluctuated significantly in the wake of the Greek budgetary crisis, Friends First chief economist Jim Power predicted that the downward pressure will continue.
"When you look at what the bond and equity markets are telling us, it is a bit surprising that the euro hasn't gone lower," Mr Power said.
He predicted that the euro could drop below 80p unless the stabilisation package brought forward last week by EU finance ministers continued to offer support for the euro zone's troubled economies.
However, the economist was not convinced that the currency's troubles are over.