The weaker Australian dollar is expected to provide a buffer for Australia's commodity export earnings, which is forecast to drop by over 10 per cent for the 2009 financial year.
In an updated forecast from the Australian Bureau of Agricultural and Resource Economics, export earnings are forecast to be $192 billion, down from the September forecast of $214 billion.
ABARE executive director Phillip Glyde said the 10 per cent drop is largely a result of the global financial crisis.
"While world commodity prices for many commodities have declined markedly over the past few months, a significant depreciation of the Australia dollar, if sustained, is expected to provide some support for commodity export earnings," Mr Glyde said.
Farm export earnings for 2008/09 are forecast to be $29.4 billion, up 7 per cent from the pervious year, but marginally lower than the $30 billion September forecast.
Crop export earnings are projected to increase by 18.3 per cent to $15.4 billion, but export earnings from livestock and livestock products are forecast to decline by 3.3 per cent to around $14 billion.
Meanwhile the value of minerals and energy exports is forecast to be around $159 billion, a downward revision from the $180 billion September forecast.
"This updated forecast of minerals and energy exports still represents a rise of 37 per cent on the previous year," ABARE said in a statement.
For energy commodities, export earnings are forecast to increase by 77 per cent to $80.8 billion while metals and minerals are forecast to increase 11 per cent on the previous year to $78.3 billion.
"The main adverse effect of the global financial crisis has been the sharply lower world prices for minerals and energy commodities," Mr Glyde said.
He noted there have been reports of contract defaults, some mine closures, production cutbacks and shipment delays because of the significant changes to the global economic outlook.
"Although there is still a chance that more shipments may be delayed or cancelled, it is too early to make a firm assessment at this stage," Mr Glyde said.
