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Strong dollar hits US agricultural export

Source: PTI
June 17, 2009 17:05 IST
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Amid a slowdown in global economic growth, a strengthening American dollar is having an adverse impact on US agricultural exports, which is estimated to decline by 17 per cent to $95.5 billion in the current fiscal, according to the US Department of Agriculture.

The US' farm export had peaked at over $115 billion in the 2008 fiscal, spurred by macro-economic conditions including strong foreign growth and a weaker dollar, it said.

"Exchange rate movements were a major factor underlying previous swings in US agricultural exports. The strengthening US dollar against competitor currencies will have a negative effect on US bulk agricultural exports," the USDA said.

The total agricultural exports from the US, which is facing the worst financial turmoil of the post-World War II era, are estimated to decline by nearly $20 billion to $95.5 billion in the 2009 fiscal, it said.

According to the USDA, bulk commodity exports in 2009 are likely to decline by 26 per cent and non-bulk products such as fresh horticultural products and processed foods are expected to fall by six per cent.

"As long as global economic growth was sustained, prospects for US agricultural exports remained robust. However, the shift of export demand from developed to developing markets also brought greater vulnerability to market downturns," it noted.

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