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Notices / Reports

Agri trends 28 June 2016 – Brexit: Opportunity or threat?

───   10:10 Wed, 29 Jun 2016

Agri trends 28 June 2016 – Brexit: Opportunity or threat? | News Article
Photo: Sabrina Dean/OFM News

The latest Agri Trends report released by ABSA highlights that trade risks residing in the UK do not lie in the physical export volumes of agricultural products from South Africa to the UK but rather in the exchange rate and the volatility thereof.


The report states that the Pound is expected to continue to weaken relative to the Euro in the short term. 

"It does not necessarily mean that the Pound will weaken further against the Rand. The Rand has already weakened in sympathy to Brexit. The weakening exchange rate (Pound) can create an inflationary environment which will, in the long run, lead to price pressure for the consumer in the United Kingdom. 

"In the long term, this will impact on the demand for imported agricultural products in the UK."


Other highlights in the weekly report include:

  • Rabobank expects Australian beef cattle prices to remain strong during the next 12 months as producers rebuild the national herd after three years of heavy culling due to dry conditions affecting many areas of the country.
  • Australian sheep producers are looking to re-stock after recent rain which drives price increases.
  • Brexit has strengthened the US dollar making US pork and poultry more expensive in the globe.
  • Poland is expected to start exporting poultry to South Africa from the 20th of June.
  • Above average temperatures are expected in the US over the next month which could bring risk premium back to the corn market.
  • France and Germany's wheat crop prospects continue to decline as analysts become worried by excessive rains and cool temperatures.
  • Soya meal usage in Russia is expected to increase by 1 million tons to 2.9 million tons in Oct/Sept 2015/16 over the next 3 years. Imported soybeans and soya meal will fulfill 50% of this increased usage.
  • Restricted wool supplies in the market, as other global markets are either on a seasonal break or at a low point of their seasonal production, will be positive for wool prices.


The latest version of the report can be downloaded here:

20160628 Absa Agri Trends.pdf


Source: Absa Agri Business

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