Announcements

Job Offers

Specials more

Top 5 -yesterday

Top 5 -last week

Top 5 -last month

Rio Negro

Argentina: Lower fruit demand from Asia expected

The external macro data of recent days are causing the problems suffered by Argentinian fruit growers to get worse.

To the sharp slowdown of the Asian economies, reflected in the major stock market crash in Shanghai, we must add the currency war between the region's most important countries, which complicates the business situation.

How does the Asian economic crisis affect the Rio Negro Valley? Many fruit providers from the southern hemisphere (Chile, New Zealand, South Africa and Australia, among others) currently supply the Asian market with significant volumes of pears and apples. Lower demand in Asia, due to a slowdown in its economy, will force southern producing countries to redirect their exports to destinations where Argentinian fruit still has a chance to enter.

Chile, for example, could channel these future surpluses to markets like Europe, Russia or Brazil; three key destinations for Rio Negro and Neuquén.

The goal for many analysts is to figure out when the Asian crisis will hit rock bottom, especially in China. If problems continue and demand from the Asian giant keeps dropping in the coming months, the Valley's exports next season will be compromised, since much will be displaced by competitors in the southern hemisphere, taking into that their apple and pear production has clear competitive advantages.

The other key issue for the Valley in the coming months is the currency war that already started some time ago.

In recent weeks, the Russian currency's devaluation accelerated again, reaching 71 Rouble per dollar; a new record. Over the last twelve months, the currency has depreciated by 92% against an inflation rate of 18%. A box of pears from the Valley, which last year cost around 900 Rouble in Moscow (around US$ 24), could now reach just US$ 15 per box because of this.

Similar currency issues, although not with such intensity, are observed in other target markets and competing countries in the southern hemisphere.

While Argentina has devalued its currency by about 10% over the last twelve months, Brazil has done so at a rate of 54%, Chile has devalued its peso by 20%, New Zealand by 26% and South Africa by 25%, only to give some examples.

But in addition to this we must take inflation into account. While in Argentina the CPI now stands at around 26%, in the countries mentioned above the index ranges between 2% and 8%.

All these statistics show the Valley's likely loss of competitiveness in the fruit market next season.


Source: rionegro.com.ar

Publication date:


Print   

Receive the daily newsletter in your email for free | Click here


Other news in this sector:


© FreshPlaza.com 2019

Sign up for our daily Newsletter and stay up to date with all the latest news!

Subscribe I am already a subscriber