Slower world growth to weigh on commodity prices
scoop.co.nz
Monday, 27 August 2001, 5:38 pm
Press Release: WestpacTrust
New Zealand’s commodity prices are likely to struggle over the next year or more as world growth continues to slow and the New Zealand dollar regains some momentum, according to Agribiz, WestpacTrust’s quarterly rural publication released today.
With the slowdown in the US economy, many exporting nations are now feeling the pinch, especially the Asian and Latin American regions. Economic growth in the European economies has also hit the wall, with no sign of a rebound. Meanwhile, Japan is confronted with nothing but unpleasant, albeit necessary, economic reform.
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“Even with lower commodity prices, the recent appreciation of the New Zealand dollar looks sustainable and likely to continue for the rest of the year. This makes it timely for exporters to consider reducing their financial risk through, for example, the use of exchange rate options, ensuring they have manageable debt levels, and ongoing financial diversification in off-farm assets. The bottom-line is that last season was exceptional. Don’t base your future spending or land valuation on this one observation”, said WestpacTrust economist, Richard Sullivan |
