New Zealand farmers, horticulturalists, exporters and traders are looking to the US Congress to see if the vote to raise the USA's debt ceiling goes ahead.

The US debt at the end of June was $14.46 trillion dollars.

See a diagram showing the scale of the US debt crisis below.

The amount able to be owed, called the government debt ceiling, can only be set by the US Congress, which is today expected to vote on again raising the limit – or face international repercussions such as a reduction in the nation's international credit rating.

The US Congress last raised the limit in February 2010 to $14.294 trillion.

Projections are that by the end of 2012 the debt will be $16.3 trillion, an amount that is 101 per cent of GDP.

A vote to make a short term debt extension of $900 billion was scheduled for mid morning New Zealand time, but was abruptly delayed by Republican leaders.
Republicans need to secure 217 votes to pass the bill in the House.
Failing to raise the US debt limit by August 2 could trigger a payments crunch that will shake the global financial system and tip the United States back into recession.

A side effect of the ongoing US political/financial crisis is a high New Zealand dollar which impacts on New Zealand's trading income both in prices obtained in offshore markets for New Zealand Goods and Services, but also on the cost of getting into export markets.

The US dollar is the main international trading currency, affecting the amounts ship owners pay for fuel oil and the costs New Zealand exporters pay for container slots.

Full ships are still leaving the Port of Tauranga, says its commercial manager Graeme Marshall today.

'It's probably a bit early,” says Graeme.

'It will have to flow though the supply chains. I think a lot of people hedge and maybe that hedging is still in place so it's not so much now it's when they have to re-do that, that will create challenges.

'The ships are still leaving here pretty full, and it is the quieter time of the year, so we have been surprised how the volumes have continued.

'Maybe in three months time would be the time to ask, when it's had time to filter through the system.”

The historic high value of the New Zealand dollar against the US dollar is a concern for Zespri, as it will be for any New Zealand exporter, says a company spokesman today.

'With Zespri's current high level of hedging for key currencies on behalf of growers for the 2011 season the high value of the NZ dollar is having a relatively small, albeit growing, impact on grower returns for this season.”

However, as Zespri's current hedging is utilised, and with Zespri growth markets being Asian markets where they trade in US dollars, should the dollar continue at historic highs it will increasingly, and materially, impact on grower returns in the future seasons.”

Another of the Port of Tauranga's major exporters, Fonterra also has a hedging policy to ‘smooth out some of the bumps' but revenue will be impacted says a spokesman today.