Economic Factors That May Affect Australian Grain Industry Flashcards
1
Q
Exchange rate
A
Exchange Rates
- Input increases as the dollar weakens
- Lower exchange rates are better for importers. Demand usually increases as the Aussie dollar falls
- Global exchange rates (value of the countries dollar) are often pegged against US dollar
- As such exchange rate at the mercy of the US economy
- Aussie dollar hit 40-year low being 68 us
- Exchange rates determine value of inputs
- The value of the Aussie dollar in decreasing rather than increasing
2
Q
Strength of economies
A
Strength of Economies
- A countries economy strength will determine how much it can afford to import
- A strong economy will mean more disposable income and a higher standard of living (increased demand)
- Economic strength determines lending capacity for countries/businesses
3
Q
Political stability
A
Political Stability
- Determine state of economy
4
Q
Seasonal variation
A
Seasonal Variation (Rainfall, Climate, Weather extremes)
- Impact global supply
- Affect global prices
- Aussie products may become too expensive to buy (expensive for countries to transport grain out of Australia)
5
Q
Pest and disease
A
Pest and Disease Presence
- If a country has a pest or disease or at risk it will limit the countries export markets
- Risk of introduction pf pest which could impact Australian grain yield, loss of green ethical tag
- Australia protected well through desert through the middle separating western and eastern states and through ocean surrounding the country.
6
Q
Consumer demand
A
Consumer demand
- Third world countries with growing population need to have food which creates a higher demand for products
7
Q
Subsidies
A
Subsidies
- Money paid to primary producers for producing goods
- US and UK still provide subsidies
- Done to stimulate countries ag sector and strengthen local economies
- Dis-advantages non-subsidised countries due to higher input costs/lower profit
- Subsidies disadvantage Aussie producers
