Evans and Meade (2006) note that traders in countries like New Zealand are exposed to market power arising from scale economies and co-ordination/consolidation issues in international shipping, given that much of the nation’s agricultural output is destined for time-sensitive overseas markets. The figure below shows that during the 20-year period studied, variations in the exchange rates typically counterbalanced variations in world prices, with the exception of only four years. They concluded that by offsetting global market swings, exchange rate fluctuations have reduced the overall volatility of prices received by New Zealand producers and that policies to stabilise the exchange rate would harm, not help, these sectors. However, exchange rate movements were not found to be stabilising for beef, wool, seafood and forestry products, implying that the exchange rate has indeed been a source of volatility in these sectors.