International Trade of Perishable and Nonperishable Food Commodities and the Effect of Currency Fluctuations: What Are the Effects of Currency Depreciation on U.S. Exports and Imports and How Do Member of the Supply Chain Deal with Currency Losses

Topics: International trade, Economics, Export Pages: 2 (377 words) Published: November 15, 2010
College of Arts and Letters International Business

International Trade of Perishable and Nonperishable Food Commodities and the Effect of Currency Fluctuations: What are the Effects of Currency Depreciation on U.S. Exports and Imports and How do Member of the Supply Chain Deal with Currency Losses

Christian Suplicki
Student of International Business
San Diego State University
San Diego, CA 92182

Abstract
The luxury of being able to enjoy food items from all over the world became part of the American way of living; but how can the United States of America ensure a constant flow (import and export) of food commodities? In this thesis I will identify the effects of currency fluctuations of the $US on U.S. imports and exports in regard of how to minimize the cost of currency losses for multi-national enterprises. Additionally, I will look at changes in market pricing strategies, in specific the changes in pass through policies of MNEs. As basis for my analysis I will utilize the economic theory which states that exports ought to rise as the local currency depreciates, since exported products are due to the depreciation cheaper to foreign buyers, whose functional currency is different than $US. The appropriate monthly trade statistics will be used from U.S. government database USA Trade Online and UN Comtrade. My empirical observation will include the comparison of perishable and nonperishable goods. I decided to analyze MNE’s strategies with the variable of perishability of the traded goods, since I am assuming that time is an important variable of changes in market strategies of MNEs. Do business strategies of international trade differ across goods whose perishability differs?

The purpose of this thesis is to find out which tools are being used by MNEs to minimize their foreign currency exposure. How can each partner of the supply chain ensure that their profit margin stays profitable? As an international business major, I would...
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