Dip in value of euro and British pound has immediate impact on Belize

By Marion Ali, Assistant Editor

The recent dip in the exchange rate with the British pound and the European Union’s (EU) euro currencies has had immediate effect on Belize’s. This is because our dollar is pegged to the US dollar, and the pound and euro have lost value compared to the US dollar.

CEO in the Ministry of Agriculture, Jose Alpuche explained to the Reporter where the direct impact lies. “There’s been some immediate impact because when you look at the recent fall in the currency exchange [for the euro and the British pound], that affects us both from a development assistance perspective, but it also impacts us on the price of some of the products that we sell because it’s quoted in euros. Anything that is convertible from US dollar back to Belize dollars means the minute the US dollar gets stronger than the EU our earnings and our assistance level actually – we get less.”

Alvin Henderson, President of the Belize Shrimp Growers Association Henderson agrees that the dip in currency value may be seen as a price hike on our end, which could mean they import less from us.

“We will have to wait and see how the UK pound stabilizes. But the immediate concern is that products originating from Belize will be more expensive to UK consumers since Belize’s production is traded in US dollars. A weakened pound makes Belize’s product appear more expensive,” Henderson shared.

Coupled with this scenario are the impacts “Brexit”, the UK’s withdrawal from the EU, could have on our economy because of possible trade shifts and their impact on a few of our exports. Belize signed the Economic Partnership Agreement with the EU, which guarantees us duty-free, quota-free access to the EU, with or without the UK. That is not likely to be affected, but what stands to change is the free movement of our goods between the UK and the EU.

For this reason, Henderson expressed hope that the shrimp industry does not suffer from the “Brexit”, but he was also hopeful because Belize’s shrimp exports meet international standards.

“One of the advantages that we do have in our industry is that we have worldwide market acceptance. Belize’s shrimp has gained access to markets in North America, the Caribbean and Europe. The UK, though, is of keen interest to Belize and so a great deal of effort has been expended over the last three years to develop the Belize brand in the UK market. The “Brexit” uncertainty, is therefore, clearly not a welcome development,” he said.

CEO Alpuche said local experts are also paying keen attention on particularly the sugar industry. “On the face of it right now, the one that we have to look at very carefully is sugar, simply because…they do have beet sugar production in the UK, which is competitive.”

Alpuche pointed out however, that the uncertainty on how much these industries will suffer will be determined by the standards arrived at in the exit arrangement that the UK strikes with the EU. He did not see Belize losing much, if any, revenues in the banana industry since Ireland and the UK do not produce bananas and they would still need to import bananas.

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