National: ABARE downgrades commodity exports forecast

Australian commodity export earning are forecast to increase by 1 per cent to more than $140 billion in 2007-08, according to the latest Australian Bureau of Agriculture and Resource Economic's Australian Commodities publication.

The December issue forecast is smaller than the 4 per cent rise forecast in ABARE's September issue, and reflects the effects of drought and the strong Australian dollar.

ABARE executive director Phillip Glide said farm export earnings were forecast to decline by more than 3 per cent to $26.8 billion in 2007-08, because of poor seasonal conditions in many parts of Australia.

The decline in farm export earnings was due mainly to a drought reduced winter grains crop, he said.

Export earnings from grains are forecast to decline by 14 per cent, mainly because of substantially reduced carry-in stocks from the previous year meaning volumes shipped will be well down.

"While much of the commodity focus recently has been on the lack of rain and its effect on both irrigated and non-irrigated agriculture, mineral resources will continue to be far and away the mainstay of Australia's commodity export performance," Mr Glide said.

The value of Australia's minerals and energy exports is forecast to be around $110 billion in 2007-08, an increase of 2 per cent from $108 billion in 2006-07.

The forecast increase is slightly less than ABARE's September forecast because of the negative effect on earnings of the stronger Australian dollar and some weakening in metals prices.

Earnings from energy exports are forecast to increase by 7 per cent to $42 billion, supported by an increase in the value of thermal coal, LNG, uranium, crude oil and related petroleum products exports.

The metals and other minerals industries are forecast to contribute nearly $68 billion- a decline of more than 1 per cent- to Australian exports in 2007-08.