Kyabram Free Press

Farmers cash in on falling dollar

- By Darren Linton

A lower-than-expected Australian dollar and near perfect seasonal conditions continue to drive positivity in the agricultur­al sector.

National Australia Bank’s Rural Commoditie­s Index is at its highest level for more than a decade and 9.6 per cent higher than this time in 2020.

NAB agribusine­ss economist Phin Ziebell said the emergence of the COVID19 Delta variant and the associated uncertaint­y had seen the US dollar continue its appreciati­on.

“This has left the Australian dollar in the mid70s rather than at US$0.80 as we previously envisaged,” Mr said.

“Of course, this is largely a good news story for Australian agricultur­e, as all things being equal, a lower currency pushes up the value of local commodity prices.”

Mr Ziebell said seasonal conditions were close to perfect for the winter crop, with the main problem being waterloggi­ng more than anything else.

However, he warned the pandemic could still have a negative influence.

“Beyond being a major health and community challenge, the economic consequenc­es of the COVID-19 Delta variant for agricultur­e will be

Ziebell labour and equipment issues, with state border closures as well as lower food service demand, particular­ly in Sydney,” he said.

The Australian Bureau of Agricultur­al and Resource Economics and Sciences June crop report points to 27.8 million tonnes of wheat this season, but Mr Ziebell said it was highly likely there would be further upward revisions.

“Canola continues to be an absolute stand-out, supported by a big rally in global oil seeds, reflecting labour shortages in palm oil plantation­s in COVIDHIT Malaysia and extreme heat in Canada,” he said.

 ??  ?? Canola is the standout crop, with prices reflecting problems overseas.
Canola is the standout crop, with prices reflecting problems overseas.

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