Abare revises down commodities forecast

The government's commodity forecaster has revised down its minerals and energy export earnings projection for 2009/10 as a result of lower contract prices for bulk commodities.

In the September issue of Australian Commodities, the Australian Bureau of Agriculture and Resource Economics said it now expects export earnings to fall by 23 per cent from 2008/09 earnings of $159.7 billion to $123 billion.

Previously, Abare had forecast export earnings for 2009/10 to reach $124 billion.

"At a forecast $123 billion, minerals and energy export earnings in 2009-10 will be the second highest on record," Abare deputy Terry Sheales said.

The value of energy exports is tipped to fall by 36 per cent to about $50 billion in 2009/10 while earnings for metals and other minerals are forecast to decline by 12 per cent to $74 billion.

Australian mine production in 2009-10 is forecast to increase by 4.6 per cent, underpinned by expected higher production of iron ore, gold, copper, liquefied natural gas and uranium.

Meantime, farm export earnings are forecast to fall this financial year because of the strength of the Australian dollar, Abare said.

The value of farm exports is forecast to fall by 2.5 per cent to $31.1 billion in 2009/10, following a significant rise of 16 per cent to 31.9 billion in 2008/09.

"Although winter crop production is forecast to increase in 2009/10, an assumed higher average of the Australian dollar is expected to lead to lower farm export earnings in the short-term," Mr Sheales said.

Total earnings from commodity exports are forecast to fall by 20 per cent to $158 billion in 2009/10, following an estimated rise of 32 per cent to $197 billion in 2008/09.