Belfast Telegraph

Eurozone crisis leaves exporters facing hard sell

By David Elliot

Worries over the eurozone debt crisis have forced the euro to a 22-month low against sterling and made life harder for Northern Ireland's exporters.

The single currency fell to just shy of 81p late yesterday, a far cry from the 90p it was worth last summer or the 98p it climbed to in 2008.

A weaker euro makes our products, which are priced in sterling, more expensive to buyers in countries which use the euro.

"Clearly if you're an export-driven company it does present a bit of a problem," said Brian Telford, head of markets at Northern Bank said. "We've been trading outside recent ranges for quite some time and it may be we've entered a new paradigm [with the euro/sterling exchange rate]."

That new paradigm was marked with the euro's fall below 83.5p, a level many exporters used as a benchmark.

"What was a notional benefit has now most likely become a cost," he said. "Exporters' customers tend to like to pay in their domestic currency and have got used to stable prices. It can be difficult to change product pricing due to currency fluctuation as this can make us look uncompetitive."

Some companies, such as manufacturers, are able to make savings when it comes to importing raw materials.

Pharmaceutical development company Almac says it has seen both the upside and downside of doing business in the Eurozone.

Philip Diamond, Almac's vice president of corporate market development, said: "In buying raw materials from Europe we have seen the benefits.

"Some of our quotes to Europe are agreed in sterling well in advance and are not affected as much by the fluctuating rates. But when we are now quoting in sterling to Europe our prices appear to be somewhat more expensive."


The high-mark for the value of the euro against sterling, reached in 2008