Yesterday the Euro was valued at US $1.18 and it reached the low prices it had nine years ago.
The fall of the Euro will have a negative impact on fruit exports from the Rio Negro Valley and Neuquén that are destined for the European markets. In short, regional entrepreneurs will receive fewer dollars for each Euro they make after selling their fruit in this destination.
At present, the region sends about 40% of its total annual shipments towards Europe. In absolute terms this percentage amounts to nearly 140,000 tons of pears and apples.
Last season, in April 2014, the Euro stood at US $1.39. Therefore, for the start of this commercial stage, the regional fruit sector will lose $0.21 dollars per Euro traded in the different markets in Europe.
Thus, the fruit sector in the Valley will lose about $3 dollars per box of fruit sold in Europe during this season, which is about to start, because of the Euro's devaluation. This means that, taking into account the volumes historically exported during the year, the sector would loose about $23 million dollars in 2015.
It's terrible news for the regional fruit sector, which also has to face the current overstock of fruit in overseas markets due to the veto imposed by Russia on imports from Europe.
The dollar's price in the international market is generating serious difficulties for other world currencies.
To offset the effects of a strong dollar, most fruit producing countries have chosen to devalue their currencies in order to improve their competitiveness when they position their products at the destinations' sales points. In Argentina, this possibility is prohibited. Different sectors of the national government have already said that the Argentine peso wouldn't be devalued this year, which will have a strong impact on the Valley's fruit sector because of the high production costs they face.
Russia, to which the region exports about 30% of its total foreign placements, devalued its currency by 80% in the last twelve months, making it impossible for Argentine exporters to place their offer in this destination.
In January last year, the dollar was being traded at 33 rubles. The collapse in oil prices took the dollar to 70 rubles in mid-December, and it has stabilized at around 60 rubles in recent days. Thus, Russia has ceased to exist as a market for the exporters of the Rio Negro Valley.
Source: Diario Rio Negro