04/03/2009 - 22:00

Commodity export dip tipped

04/03/2009 - 22:00

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COMMODITY exports are forecast to fall by 17 per cent in the 2010 financial year but farm export earnings are tipped to rise over the next two years, a report for the nation's commodities forecaster says.

COMMODITY exports are forecast to fall by 17 per cent in the 2010 financial year but farm export earnings are tipped to rise over the next two years, a report for the nation's commodities forecaster says.

In its March issue of Australian Commodities released this week, the Australian Bureau of Agriculture Resource Economics (Abare) says commodity exports are expected to drop to $162 billion in 2009-10.

This follows a projected 33 per cent lift to $196 billion in 2008-09.

However, the fall is expected to be short-lived, with total commodity export earnings projected to start climbing from 2010-11 and are likely to top $175 billion by 2013-14.

Growth in China and India will be a major factor supporting Australia's energy and minerals commodity demand over the medium term.

The report says the decline in the total value of commodity exports is reflected by a forecast decline of 22 per cent in export earnings from mineral resources to $126 billion in 2009-10 from $161 billion in 2008-09.

Farm exports are likely to increase by 12 per cent to $30.8 billion in 2008-09 and are forecast to rise further by another 4 per cent to $32.1 billion in 2009-10.

Farm products for which there are likely to be increased export earnings for 2009-10 include wheat, barley, canola, lupins, peas, raw cotton, sugar and lamb.

"A substantial increase in crop production combined with a significant depreciation of the Australian dollar is expected to support farm export earnings in the short term," Abare executive director Phillip Glyde said in a statement.

Export earnings forecast for 2009-10 in the energy and minerals sector are also expected to fall by 34 per cent to $51 billion in 2009-10, driven by lower forecast prices for oil and coal.

Metals and other minerals will also see a decline by 11 per cent to $75 billion in 2009-10, due in large part to a drop in Australian iron ore prices.

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