Greek crisis impacts UK meat exporters

UK meat exporters to the EU could be hit as the pound continues to strengthen against the euro in the wake of the Greek debt agreement, according to one market analyst. 

Matt Incles, senior consultant at Promar International, said he had thought the euro would rally more than it did after the 11th-hour Greek bailout following talks on 11 and 12 July. In fact, it only strengthened slightly.

“There’s a possibility the markets have not got too optimistic because Greece has got to pass reforms through parliament and there have been protests over that,” said Incles, referring to Greece’s part of the deal. “There could be a stronger euro rally if all goes through as expected.”

However, continued EU economic struggles were likely to bring the euro’s value down again and the pound would continue its current trend of increasing in strength, he said. That would make it tougher for UK exporters selling into the EU and would make non-EU markets more attractive.

He therefore called for more export support. “… There has been much talk of rebalancing the economy in favour of manufacturing industries (of which food and drink is the largest) and of an export-led recovery, but little direct support has been provided.”

By contrast, a weak euro would mean EU suppliers would be more attractive to UK buyers, said Incles. “There’s a significant difference now in the exchange rate. The pound is back up to where it was pre-2008 financial crisis and that gives UK buyers an advantage.”

However, that could hinder 100% British sourcing policies, he said. “It places pressure on UK producers supplying UK markets. Why would I buy from the UK, when I can get things more cheaply from Europe?”

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