Wildfires threaten Australian exports as drought rages on

Wildfires have been blazing across the Australian east-coast over the weekend. With New South Wales being hit hardest. Reports have suggested that around 70 separate fires are being tackled across the state. This is a huge blow for Australia as resources are now being poured into the emergency services to try to put out the inferno as well as tend to those injured by the fire.

Honey prices set to skyrocket as fire wreaks havoc on the environment

Sadly, the fire has taken the lives of three individuals, with many more reported to be injured. But there are also other victims like bees which have been caught up in the wildfires, alongside this the flowers necessary for bees to cultivate their honey have also been destroyed. Beekeepers in the local area are reporting around an 80% drop in production, with predictions that the price of honey could jump up by 10% over the coming weeks.

Even after the fire, the amount of drought left behind ensures that the flowers do not grow, and even if they do they do not produce as much nectar as they once did. This is set to put pressure on both the bees and beekeepers alike.

Australian export figures prepare for a drop as a result of the fires

Though honey production isn’t one of the major sectors in the Australian economy, it does make up a small part of its total Gross Domestic Product (GDP) and is a contributary factor. Plus, bees are essential for the crucial pollination of flowers and without them the food industry would suffer. A spokesperson for Hive +Wellness mentioned that the beekeeping industry is not a billion-dollar industry, but it does support the billion-dollar industries and highlighted that it is the cornerstone of Australian agriculture.

Knock on effects from the wildfires for the AUD

With such a widespread operation in place to try to put out the fires which are alight across the state of NSW, there is likely to be a knock on effect for the Australian dollar. The honey production in the country will take a hit and thus will not be able to supply as much as they may have before the fires. This will no doubt mean less GDP from exports for the month and those to follow while the industry recovers. Alongside this, the money spent on emergency services and clean-up operations is likely to be an unexpected usage of Australian budgets.

With reports of the GBPAUD interbank exchange rate at a low of 1.8625 to start this week after last week’s decline, the AUD will be looking to the third quarter wage data which is due Wednesday and October’s jobs data which is expected Thursday for a lift of optimism amidst this unpredictable news of the wildfires.

If you would like to learn more about current GBP/AUD exchange rate and future events that may influence them, you can get in touch on +44 (0)1494 416 503 to discuss these factors in more detail or contact me directly at dcj@currencies.co.uk.