17 January 2000
Commodity prices follow Euro

AGRICULTURAL commodity prices and support levels are closely linked to the value of the Euro against Sterling, observes Jimmy McLean, head of agricultural services with the Bank of Scotland.

The result of this link is that trends in farm profitability follow an almost identical pattern to the fluctuations of the Euro against Sterling.

In practice, Mr McLean says this has meant commodity prices have fallen as the Euro lost 11% of its value against Sterling in its first year.

McLean sets out the case for the Euro to recover against other currencies, but admits there are still uncertainties over that recovery.