International Trade
Issue No. 65 - June/July 2012
First hard times for import and export
by Mark Callus
South Australia’s largest privately owned international freight forwarder and customs broker, Customs Agency Services, says for the first time ever, economic circumstances are making life tough for Australian importers and exporters at the same time.
“Over the past 36 years the trend has been for exchange rates and other factors to overall either clearly favour our importing or exporting customers. But now, business conditions are such that both importers and exporters are generally challenged,” says CAS Mark Callus.
“A strong Australian dollar naturally helps those Australian companies that import, but makes life for our exporters very difficult.” Australian exporters are being hit by the high Australian dollar which not only prices them out of many overseas markets, but significantly trims the exporter’s profit margins.
Traditional key markets, USA and Europe, are still struggling economically three years into the GFC but most alarmingly, the Chinese economy is cooling.
Australian exporters’ and importers’ labour costs and overheads keep increasing, the Federal Government is not delivering corporate tax cuts and the June 2012 carbon tax and its compliance red tape are imminent. Forecasts suggest businesses could pay as much as $18.8 billion to purchase carbon offsets.
“The real and long-term risk of course is that if you can no longer sell your product to your overseas customer, say due to the high dollar, then the customer will find a supply alternative,” Mark says.
“Even when the dollar does eventually drop, which could be years away, the challenge will be to re-secure that lost customer.”
Mark says the Australian dollar’s recent slide back to parity with the US dollar is a promising sign.
“Having said that, no Australian manufacturer or supplier should let the long-term cyclical strength or weakness of the AUD dictate whether they can or can’t sell their products. The key ...
