The dollar's 26 per cent increase in the past year, is affecting Kiwi exports, while making imports cheaper. The economic conditions are causing problems for processors in their export and domestic markets, and could lead to more closures if the problems persist.

Gisborne-based Cedenco Foods said it will close its frozen food processing site, with loss of seven full time employees and 120 seasonal staff.

Richard Lawrence, managing director of Cedenco, said the plant was no longer economically viable as most of its products were for the export market.

"The export market is currently extremely difficult and we have found ourselves uncompetitive with other options that are available to our customers," he said.

Cedenco Foods will continue to operate two Gisborne factories and its Whakatu based food-processing factory.

The high value of New Zealand currency has partly been driven by the rise in interest rate, which was set at a record eight per cent last month, by the Reserve Bank. The third increase this year is designed to curb spending and house prices, but is also affective businesses want to export and in debt.

A recent poll by the New Zealand Institute of Economic Research found that 37 nine per cent of 518 companies surveyed expected the economy to deteriorate in the next six months. Costs are expected to rise according to 48 per cent, while 35 per cent said they are likely to put up prices within three months.