New survey suggests Danish exports hit by caricature crisis

Jul 24, 2006, 14:55 GMT

Copenhagen - Danish exports to the Middle East and other Muslim countries were noticeably affected by a consumer boycott called after a Danish newspaper published caricatures of the Prophet Mohammed, officials said Monday.

The Danish Chamber of Commerce said exports to 25 Muslim countries dropped 17 per cent for January to April 2006, compared to the corresponding period in 2005.

In all, Danish exports dropped 700 million kroner (119 million dollars), compared to the corresponding period last year.

'The drop mainly hit food and dairy products,' chief economist Jens Brendstrup told Deutsche Presse-Agentur, dpa.

Exports of pharmaceuticals and machines were not affected to the same degree, he added, noting that food products were often 'clearly marked' making them easier targets for consumer boycotts as urged late January by several Muslim clerics.

In addition, the drop in exports of machines - ranging from cement mixers to aircraft engines - started a year ago and therefore the Chamber of Commerce analysts believed the reduction was more linked to the unfavourable exchange rate between the Danish currency and many currencies in the Middle East, including the Saudi riyal, were tied to the US dollar.

Overall exports to Iran fell 43 per cent for the period, in Saudi Arabia they dropped 39 percent, in Kuwait the decrease was 32 per cent in Kuwait, while it fell 5 per cent in the United Arab Emirates.

Turkey - Denmark's main export market in the Muslim world - registered a 6 per cent increase while exports to Malyasia grew 15 per cent, the agency said.

Brendstrup said it was likely Danish dairy food exports would have a tough time rebounding to previous levels since New Zealand had been successful in many key markets, including Saudi Arabia, Indonesia and the United Arab Emirates.

The New Zealand dollar also benefited from its link to the US dollar, compensating fluctuations in Middle East currencies.

The Chamber of Commerce is financed by 15,000 member companies.