‘1400 Won High Exchange Rate’ Reef… Farm Management in Red Light

Published Nov 14, 2024

Tridge summary

The article highlights the concerns of the agricultural sector due to the recent surge in the won-dollar exchange rate to 1,400 won, a high point under the administration of former US President Donald Trump. This development is expected to increase the costs for farm management due to the higher prices of essential imports such as fertilizers and feed. The rising exchange rate could also lead to an increase in crude oil prices, resulting in higher costs for gas and electricity, and potentially triggering a farm debt crisis due to the sharp increase in farm debt since 2018 and stagnant income growth. Furthermore, the high exchange rate could result in lower demand for agricultural products, leading to a decrease in their selling price, which could impact the sustainability of agriculture. Experts recommend strategies to stabilize farm income, enhance agricultural competitiveness, and strengthen risk management to prevent farm debt from leading to bankruptcy.

Disclaimer: The above summary was generated by Tridge's proprietary AI model for informational purposes.

Original content

As the ‘1,400 won per dollar exchange rate’ becomes a reality, a red light has been turned on for farm management. There are concerns that profitability will decrease as input prices rise and the demand base for agricultural products weakens. The won-dollar exchange rate has fluctuated since Donald Trump was elected as the 47th President of the United States, and closed the week at 1,406.6 won on the 13th. As Trump has been announcing large-scale tariffs and expansionary fiscal policies, the strength of the dollar is expected to remain fixed for the time being. The high exchange rate acts as a factor that increases farm management costs. This is because most of the raw materials for essential agricultural supplies such as fertilizers and feed are dependent on imports. If the exchange rate rises, crude oil prices are also likely to rise. Although the government is implementing support policies such as duty-free oil for the agricultural sector, the scale of support is steadily ...

Source: Nongmin