By FWi staff
REVALUATION of the Green Pound which would mean a cut in intervention prices and support to UK farmers is “now inevitable”, analysts believe.
Sterling soared to a 10-year-high against the Deutschmark today, ending the week at almost DM3.07. A Green Pound revaluation on May 3 now looks unavoidable.
The Pounds strength has already triggered three devaluations of other European Green currencies the Greek Drachma, the Portuguese Escudo and the Spanish Peseta. And this week, the Danish Krona and Dutch Guilder were also devalued.
The Real Monetary Gap between the Pound and other European currencies is now running at almost 7% well above the minimum 5% that would trigger a revaluation.
At current exchange rates, the intervention price for barley would fall by 3/t. That would mean a May intervention price of 84.80/t, which is 2.40 below the price for April.