Currency volatility squeezes fruit importers as foreign exchange risks erode margins

VOLATILE currency markets are emerging as a major threat to the profitability of fruit importers and exporters, with a new report by Verto warning that foreign exchange (FX) fluctuations are increasingly undermining already thin margins in global agricultural trade.

- YOGASHEN PILLAY

A REPORT by cross-border payments platform Verto has indicated that volatile currency conditions are impacting fruit importers' profitability.

(TIMOTHY BERNARD Independent Newspapers)

According to the report, the traditional risks associated with fruit trading—such as weather, logistics and harvest cycles—are now being overshadowed by financial pressures linked to currency movements and outdated payment systems.

“Harvest cycles are short, logistics are complex and margins are thin. But increasingly, the greatest risks facing importers and exporters are not in orchards or shipping routes, they are in currency markets and financial infrastructure,” stated the report.

The report added that fresh produce shipments can take 30 to 60 days to move from orchard to retailer.

“During that period, suena markets may move dramatically, affecting landed costs, margins, and working capital. A shipment that leaves port profitable can arrive weeks later with its margin significantly eroded by exchange rate movements.”

The report said that despite this, many agricultural trading businesses still rely on legacy banking infrastructure and reactive FX management, exposing themselves to unnecessary financial risk.