Exporters are suffering as the Australian dollar heads upwards of 81 US cents for the first time in eight months, but import companies are reaping the benefits after months of seeing the dollar’s value plummet.
Ian Murray, executive director of the Australian Institute of Export, says that while the high value of the dollar is becoming a problem, the rapid fluctuation is of the most concern to exporters.
“The most important thing is to have a dollar that’s steady, fluctuating dollar makes it harder to manage business,” he says.
“We’d rather see it around 70 US cents, most definitely. There’s no doubt that the one thing that’s been positive in the last four months or so has been the competitively low dollar, and having it move up to these levels is making it difficult for exporters.”
Murray also says that businesses can use hedging mechanisms and contractual arrangements to soften the blow of the dollar, but that all companies will be affected.
“In the agribusiness sector it’s competitive, it operates more on a day-to-day basis and they’re going to feel it. If there is a strong dollar and it stays that way for a long period of time, it’s going to hurt.”
Meanwhile, Peter Graham, managing director of Allied Brands, is breathing a big sigh of relief following the dollar’s rise.
His company, which runs the Baskin & Robbins, Cookie Man chain and Kenny’s Cardilogy franchise chains, imports a range of goods from China (paid for in US dollars) and ice-cream from Canada.
“I can remember last year when we went to bed when it was 98 US cents and we woke up and it was 68 US cents, so the quicker it goes back up the better it is for us, that’s for sure.”
James was the editor and publisher of SmartCompany and LeadingCompany for five years. He is now the Australian Financial Review‘s companies & markets editor, and a former BRW editor.
