Farmer converting €100,000 into sterling only receive £86,210

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THOUSANDS of farmers this year are expected to lose a large percentage of the profit by leaving themselves exposed to significant financial losses because they have not protected properly against foreign exchange movements.

A farmer converting a subsidy of €100,000 into sterling in December 2010 would have received £86,210 yet this would have dropped by 3.75 per cent to £82,990 had they not been reviewing the market and completed the transaction less than two weeks later in early January,, says currency specialist David White Managing Director from Axiafx

Mr White also suggests even though many farms conduct business in foreign currency, often buying supplies from the eurozone, they have no formal hedging strategy in place to manage their foreign exchange risk.

It also claims the difference between exchange rates offered by high street banks and specialist foreign currency providers can be up to 5 per cent depending on the amount of currency transferred.

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