Pain grows for Irish exporters as the pound's slump continues
Irish agriculture and food exporters are feeling the pressure of Brexit uncertainty as the pound-to-euro exchange rate hits a nine-month low.
The pound continued its downward slide as fears of a no-deal Brexit continued to pile pressure on the British currency, which was down in value to €1.10, and it shed 0.3pc versus the dollar to leave it at $1.28, its lowest level for almost a year.
Sterling's slump is being blamed on investor concern that Britain will crash out of the EU without a trade deal.
The weak pound may present good value for tourists heading from Ireland to the UK this summer, but it is troubling for our domestic tourism industry, and it presents a major risk to Irish exporters.
Bord Bia overseas trade manager Shane Hamill said the depreciation of sterling means it's more important Irish exporters find ways to hedge against Brexit.
"In 2017, 80pc of respondents to Bord Bia's Brexit Barometer reported that they would face severe difficulties at an exchange rate of 90-94p to the euro," he said.
"In 2018 this has reduced to 55pc. While the value of sterling remains a risk to growth, exporters to some extent are managing volatility through hedging and recovering cost increases from the market through managing costs and prices."
Gerard Reilly, of Reilly Mushrooms, in Walderstown, Co Westmeath, warned that 15 companies had closed down since the Brexit vote two years ago.
"The exchange rate is currently around 89c/90c against the euro. That's putting pressure on exporters," he said.
"There were around 700 growers in Ireland in 2004 but now there's only around 40."
Mr Reilly added that since he exported 90pc of his product to the UK, a hard Brexit would be detrimental to his business.
"We are continuing to trade and grow the same amount, but we are growing in a more nervous environment."
Meanwhile, Trevor McHugh, managing director of forestry company Veon Ltd, said while fluctuating currency rates had the ability to affect Irish exporters' competitiveness, the exchange rate tended to settle after an extreme.
"The currency has moved up and down over the last two years. We have seen extremes, but it does tend to settle. Timber prices remain strong and there is a demand in the UK for Irish products as they can't produce the timber they need," he said.