15/12/2009 - 14:21

$A hurts commodity export earnings

15/12/2009 - 14:21

Bookmark

Save articles for future reference.

A higher Australian dollar combined with lower commodity prices is expected to more than offset higher production volumes for the nation's resources sector, with export earnings tipped to fall 20 per cent in 2009/10.

A higher Australian dollar combined with lower commodity prices is expected to more than offset higher production volumes for the nation's resources sector, with export earnings tipped to fall 20 per cent in 2009/10.

The Australian Bureau of Agriculture Resources Economics said today in its December issue of its commodities report that earnings from energy and mineral exports will fall to $129 billion in the 2010 financial year. The forecast is an upward revision of Abare's forecast in the September quarter of $123 billion.

Separately, the value of energy exports is tipped to fall by 31 per cent to $54 billion while metals and other minerals are forecast to decline by 10 per cent to $75 billion.

Meantime, a worse than expected winter crop in the current season mean farm export earnings are likely to drop 6 per cent to $30 billion in 2009/1. It follows a rise of 16 per cent to $32 billion in 2008/09.

"The forecast decline in farm export earnings in 2009-10 mainly reflects the adverse effects of a significantly higher Australian exchange rate, especially against the US dollar, and a downward revision to winter crop production in the current season," Abare deputy executive director Terry Sheales said in a statement.

However, Abare predicts farm export earnings will still be 9 per cent higher than the $27.5 billion figure recorded in 2007-08.

Commodities forecasted to rise include raw cotton, sugar, rice and peas.

However, the drop in export earnings is expected to come from a decrease in earnings from wheat, barley, canola and livestock products.

 

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

Subscription Options