SPS - Euros or sterling? - May 2010
It’s that time of year when you have to complete your Single Payment application and make the decision to take payment in either Sterling or Euros.
As at the date of writing this article, the pound is trading at around £1 = €1.1343 and has been strengthening steadily since the start of March 2010. The exchange rate for the 2010 Single Farm Payment is set at whatever the rate happens to be on 30th September 2010 so it is impossible to know with any certainty what this will be.
If the pound continues to strengthen then it would be beneficial to take payment in Euro’s and vice versa.
It is possible to hedge your payment and many banks will assist you with this so that you effectively fix the exchange rate at 30th September 2010 by way of a forward contract. High street banks in particular have issued guidance on this and is available on request (note that they will not consider this unless your SFP is €40,000 or more).
It is important to ensure that you are aware of all costs and risks before signing up to any contract - let us know if you are in any doubt.
To see more articles, see these pages: