Exporters do not celebrate with high dollar price euphoria

14/08/2015

The dollar seems to have no ceiling. On Monday, the currency started a new week, marking a new maximum in six years, when it reached $ 679. This indicator influences factors such as the price of benzines, in the CPI and in the UF, a situation that complicates everyone's pockets. However, there are others who see this rise with better eyes, although they do so with caution.

On several occasions, the Ministers of Finance and Economy have pointed out that a high exchange rate is good to get out of the economic slowdown because it props up export sectors, but will it be that way?

«We are not of the idea of feeling benefited with a high dollar«, clarifies Ronald Bown, president of the Association of Fruit Exporters of Chile AG (Asoex). The leader highlights that they cannot bear the responsibility of being the engine to recover growth, since they are «the authorities are in charge of propitiating an economic environment and an adequate business climate for the economy to grow«.

Meanwhile, Ema Budinich, manager of the studies department of the National Agricultural Society (SNA), assures that any benefit depends on how long this high value of the currency lasts. «The dollar market is super volatile", so that "It is not a true fact, and although exporters are happy, it is not to say that it is fantastic", it states.

In turn, Bown is emphatic in pointing out that «the dollar goes up because there are problems. And not only in Chile, throughout the world is rising because there is less economic dynamism«, and adds that «the picture is not as spectacular as everyone thinks«.

In that sense, Budinich provides another piece of information. «A high dollar increases the cost of fuels and there are items in agriculture, where this has a high incidence in the cost structure«, as well as that of energy or such vital elements as fertilizers, which are imported, he highlights.

On the other hand, the president of Asoex gives an account of other factors that have affected the sector and that, in his opinion, could not be compensated. «The port strikes occurred just in time of harvest have complicated us a lot, have affected our prestige in terms of compliance with commitments and have also involved an additional cost", it states.

To this, the SNA studies manager adds the current scenario of changes proposed by the Executive. «The series of structural reforms that have arisen are dissuasive to investment. The dollar may be fantastic, but if we are going to have a labor law that is a real straitjacket, then the truth is that the intentions of investing in the agricultural sector are not going to come«, closes.

Economists agree

Economists, in some way, tend to agree with this position of the agricultural sector. «For export sectors such as mining - and particularly the copper industry - which is dependent on imports of advanced technology capital goods, such as machinery and equipment, can significantly affect their investment levels«, highlights Mario Valenzuela, vice dean of the Faculty of Economics and Business at San Sebastián University.

Meanwhile, Sergio Tricio, general manager of Ruvix explains that what is happening with the US currency «It is a good measure and should help non-mining sectors. Although in any case, today the world is with a low growth and that makes that they demand less products«.

And he agrees with the unions in that the different proposed reforms subtract the benefits of a high dollar. «Nowadays it is precisely this that benefits the productive sectors, which can sell with a more competitive scenario, but on the other hand, investing in the current conditions may not be an adequate decision, precisely because the country is with these changes and reforms"He maintains.

Along these lines, Valenzuela reaffirms, explaining that «For sectors that need to develop or expand their productive capacity, it is very difficult to make a decision that involves the long term«.

And although he also highlights that the costs for this area of our economy may rise, Tricio nevertheless concludes that «the increase in the price of the dollar is beneficial for the entire export sector«.

Source: Diario Pyme