The New Zealand dollar’s recent rise against the Euro, a currency shared by 16 countries, is making Kiwi exports to Europe more expensive.
Countries using the euro account for four of New Zealand’s top 20 export markets. The NZ dollar rise will start putting pressure on exports, Radio New Zealand says.
Managing director of wool exporter Segard Masurel, Peter Whiteman, was quoted as saying his customers are struggling to pay.
“We’ve seen it years ago with the processing capacity moving from Europe in the merino and fine wool sector for apparel and knitwear move to China.
“We’re starting to see that now really gaining some momentum in the carpet sector too that is moving to Asia. The weak euro is only going to move that capacity there faster.”
The $1 billion kiwifruit industry relies on Europe for half of its sales.
The chief financial officer of exporter Zespri, Merv Dallas, says last season’s fruit is only now being sold in Europe and the weaker euro will take a heavier toll as currency hedging is used up.
Currency strategist Derek Rankin believes there is more pain for exporters to come. He has revised his forecasts and now has the New Zealand dollar peaking at 60c against the euro.
