Frutas y HortalizasSep. 28, 2016
Brexit deja a la industria del champiñon irlandés en una situación confusa
The Irish mushroom industry is “in turmoil”, according to IFA mushroom committee chair Gerry Reilly. At Tuesday 27 September’s presentation to the Oireachtas agriculture committee, Reilly said €7m worth of exports and 130 jobs have been lost since the Brexit vote in June.
Currently, Irish growers produce around 70,000t of mushrooms, of which 80%, worth €120m at farm gate (double the value of Irish potatoes), is marketed to UK multiples through a network of marketing agents. Grower numbers are below 60 and these growers employ 3,500 people, with most of these jobs in rural Ireland.
However, since the Brexit vote in June, the Irish mushroom industry has been “thrown into turmoil”, with some €7m worth of mushroom exports and 130 jobs in the industry lost, according to Reilly.
“Since the UK vote to leave the EU, the mushroom industry in Ireland has been thrown into turmoil, and growers are in loss-making territory, resulting from the sudden and significant weakening of sterling,” he said.
Weakening of sterling
The weakening of the sterling is having such a damaging effect because the marketing companies that sell Irish mushrooms negotiate their contracts in sterling. In addition, mushroom prices are forward agreed, generally for contract periods of up to 12 months. As they are fixed contracts, mushroom producers cannot renegotiate the price the receive.
The immediate difficulty is that contracts have been agreed in sterling, when sterling was at a much stronger position against the euro
For the first six months of this year, the average exchange rate was £0.78 to €1. This meant a payment of £1 was worth €1.28 to Irish producers. Today, that same pound is worth only €1.16, sterling having weakened by over 13% since the Brexit vote.
“In summary, the immediate difficulty is that contracts have been agreed in sterling, when sterling was at a much stronger position against the euro,” Reilly explained. “In recent weeks, three mushrooms farms have gone out of business.”
CMP estimates that €10m will be lost on an annual basis across the CMP farms in the Republic of Ireland, translating to an average loss per farm of somewhere between €250,000 and €300,000.