Southeast Asian currency slump squeezing U.S. exports
Southeast Asian currency slump squeezing U.S. exports
SEATTLE, Washington (AFP): Sharp devaluations of Southeast Asian currencies have begun to put the brakes on Washington and Oregon state exports, especially agricultural products.
The Thai baht, Philippine peso, Indonesian rupiah and Malaysian ringgit had been overvalued but have nosedived over the past two months.
This means expected U.S. apple sales to the region could drop by 25 percent, a US$40 million loss to the industry, said Washington State Apple Commission promotions director Terry Elwell.
Washington accounts for all but one percent of U.S. apple exports.
Shipments in the state's 1.1-billion dollar in soft white wheat exports, 90 percent of which go to Southeast Asia and the Middle East, have been delayed as Southeast Asia buyers scramble to find cheaper alternatives.
Wheat exporters are struggling to hold losses below ten percent against competitors' government-run buying boards, which can manipulate prices to win contracts, Washington Wheat Commission CEO Tom Mick told the Puget Sound Business Journal.
Oregon agricultural exporters have felt little impact so far but anticipate the biggest drops in high-value items like wine, said Laura Barton, international trade manager for Southeast Asia for the state department of agriculture.
Markets in Oregon pears and processed, frozen potatoes will be moderated in the region after several years of healthy growth, industry sources predicted. Shipments of pears, an exotic fruit filling a niche market, may be cut in half this year, said the Oregon-Washington-California Pear Commission's Kevin Moffitt.
The devaluation, which analysts agree is a healthy, temporary market adjustment, left some food exports largely unscathed. Washington cherry growers, harvesting before the late-summer slump, reported record sales all through Asia, said industry chief Ken Severn.
Meanwhile, banking experts in Chicago said here Wednesday that faltering Southeast Asian currencies can expect no respite from financial markets since needed policy reforms have yet to materialize,
"The market will not give them peace. ... The bottom is near, but I'm not sure we've reached it yet," Hans Belcsak, president of the New York-based Rundt and Associates consulting firm, said at the opening of a three-day, international trade and finance conference.
He added that the Thai baht, the Philippine peso, the Indonesian rupiah and the Malaysian ringgit were no longer overvalued as the result of their nosedive over the past two months.
"But the problem will not be over for a long time as the policies (needed to satisfy foreign investors) were not there to restabilize the market," he added.