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$100 Record! Jamaican Dollar Weakens Against US Currency
Published: Saturday | June 8, 2013
THE JAMAICAN dollar reached a record high against the United States (US) currency yesterday, the weighted average selling rate climbing to J$100.08, according to the Bank of Jamaica (BOJ) foreign-exchange trading summary.
The local currency also lost ground against the Canadian dollar and the British pound sterling, the weighted average selling rates finishing at J$97.90 and J$155.43, respectively.
Traders sold US$40.4 million for as high as J$104.54, and purchased US$29.5 million, the highest at J$101, the BOJ data revealed.
Just over a year ago, the US dollar was trading at an average rate of about J$86.61, the previous year in the region of J$85.77. It crossed the J$87 mark on February 28, 2012, reached J$88 on May 30, J$89 on July 10, J$90 on October 3, J$91 on October 23, and J$92 on December 5, last year.
According to the historical exchange selling rates provided by the BOJ in a time series of the US dollar versus the Jamaican dollar, in 1971, the US dollar was sold at an average rate of J$0.77.
This moved to J$0.91 on January 17, 1973, J$1.05 on January 13, 1978, J$1.55 on May 9, 1978, reaching J$1.78 by May 2, 1979.
DEVALUATION
On October 23, 1983, the Government devalued the Jamaican dollar to J$3.15 to the US dollar and, with the continuation of a floating exchange-rate regime, reached J$6.50 by January 1990.
The local currency reached J$8.12 by the end of 1990, plummeted to J$41.49 by January 4, 2000, and to J$67.15 by the close of 2006.
By mid-2009, the currency had climbed to J$89 to the US dollar. It settled in that zone for some time before making some gains, returning to the J$85 mark in 2010.
But by December 2011, after levelling out in the J$86 range, the currency again went into freefall, crossing the J$100 mark yesterday.
Currency depreciation instantly hits consumer purchasing power and reduces wages.
A weaker domestic currency makes imports more expensive, but this could act as a barrier against imports, thus improving the country's trade balance.
Domestic-currency depreciation helps attract more foreign domestic investment. This is so because international companies would find it more attractive to establish businesses in Jamaica.
However, a major disadvantage of depreciation in the value of the Jamaican dollar is that it will increase the burden of servicing and repaying the foreign debt of the Jamaican Government as well as those companies which have US-dollar denominated debt.
Tracking J$ over three decades
1971 - J$0.77-----------------------------
1980 - J$1.78 20yrs
1990 - J$6.50-----------------------------
2000 - J$41.49 20yrs
2010 - J$89.59----------------------------
2011 - J$85.87
2012 - J$86.60 3yrs
2013 - J$92.77
June,2013 - J$100.08------------------------
2014 - J$110.57 J$111.18
Source: Jamaca Gleaner/Power 106
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Jamaica faces severe economic challenges
Since the mid-1990s, real GDP growth averaged less than 1 percent a year, which has contributed to sustained high unemployment rates and large-scale emigration of labor.
Anemic growth and recurring bouts of financial market instability have been rooted in increasingly high levels of public debt, which reached 137 percent of GDP at the end of 2011, and is currently approaching 150 percent of GDP. Sustained high debt service obligations and large refinancing needs have resulted in costly risk premiums and helped crowd out private sector investment.
The high debt levels have also exposed the country to adverse shifts in market sentiment. With interest payments alone accounting for approximately 37 percent of government revenues, the fiscal accounts are stretched too thin to pursue productivity-enhancing social and infrastructure investment.
Source: Jamaica’s Memorandum of Economic and Financial Policies & Technical Memorandum of Understanding
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Drink real milk’ campaign seeks to revive dairy industry
BY JAVENE SKYERS Observer staff reporter
Friday, January 29, 2016
JAMAICA’S local milk production has, since 1992, consistently been on the decline, however, the dairy industry is gearing up for a revival by way of the Drink Real Milk Campaign.
Through the efforts of its four key stakeholders — the Caribbean Broilers Group (through Nutramix), Newport-Fersan Jamaica Limited, Seprod (through Serge Island) and the Jamaica Dairy Development Board — the campaign is targeted at reviving what was once a thriving industry in Jamaica.
The campaign, which was officially launched yesterday at the Terra Nova Hotel in Kingston, saw the brainchild of the project — Nutramix — alongside the three other major sponsors sharing with the press the plans to make a change and take the dairy industry into the future.
They all outlined their solidarity for not only embracing and promoting sustainable agricultural development but also investing time and resources in order to reduce the food import bill, increase the country’s Gross Domestic Product, reduce unemployment, especially among farmers, and reduce the country’s dependence on foreign exchange.
According to Chief Operating Officer for the CB Group Matthew Lyn, the stakeholders will be bringing together their expertise from their various operations to spearhead significant changes in the industry.
Lyn highlighted the initial challenges that preceded the CB Group’s now successful egg industry and pork products, stating that the company focused only on production, neglecting the consumer side of business which resulted in slow growth.
This was before the company decided to focus on both as a “two-pronged approach” to push their products forward.
This is the same approach that will be applied to the Drink Real Milk Campaign as efforts will be shared equally at boosting production as well as consumer awareness. The CB Group representative said that coupled with the rest of the stakeholders, the campaign, which had been in development for about two years, will be a formula for success.
“Today we are here to launch a national long-term campaign, it’s more than just getting people to drink more milk, it’s more than getting people to think about reviving the dairy industry, it’s more than just better pasture management or better breeding programmes, it’s a lot more than the story here. It’s four companies coming together to do something really good for Jamaica I want to say thank you to all the partners,” Lyn told attendees.
CEO of Seprod Group of Companies, Richard Pandohie also underscored the key ideas made by Lyn, adding that Seprod is proud to have pledged its support to the campaign which he explained is a 360-degree approach targeted at reminding consumers about the health benefits of real milk as well as revitalising the industry and the economy.
“Seprod is fully committed to the national growth agenda and continues, to innovate to reduce importations; in the last two months, for example, we’ve introduced Serge Evaporated Milk, the only evaporated milk on the market with real milk, our investment in over $500 million in Serge factories and farm in the last 12 months have set the platforms for some exciting innovations over the next six months,” Pandohie said.
Business Development Manager at Newport Fersan Jamaica Limited Hedda Rose Pitter stated that while many people would not have known about the challenges faced by the dairy industry over the past 20 years, the presence of the stakeholders signified that the milk industry has not died but instead is on the verge of rebirth.
“At Fersan, we believe in sustainable agriculture and the nation’s food security and that is why we continue to lend our support to the Jamaica, agricultural sector. Our decision to be a part of the Drink Real Milk Campaign is simple, we have a pivotal role to play in the sustainability of Jamaica’s food ministry and milk is no exception,” Rose Pitter said in her remarks.
She pointed out that as the only manufacturer of fertiliser in Jamaica Fersan ensures that each day their agronomy and sales team are focused on improving productivity and ensuring that farmers use sound agricultural practices. Additionally, she stated that through their Precise Management System, programmes will be provided for optimum pasture productivity on more than 2000 acres reserved for grazing for dairy cows.
According to CEO for the Jamaica Dairy Development Board, Hugh Graham, the board once considered a generic milk campaign around 2013 but it was not yet the right time to push the industry forward. Graham highlighted that with the partnership with Drink Right Campaign there is now a growing path to push the dairy industry ahead.
“This campaign will benefit our dairy farmers who toil relentlessly to make a living, who have to put up sometimes without any sleep because they are concerned they are going to lose cows overnight. It supports the economy far more than any model that is based on importation,” Graham stated.
“The Jamaica Dairy Development Board unreservedly endorses this campaign and are proud to be named partners in this nation-building campaign with our private sector partners,” he said.
Source: Jamaica Observer
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