A combination of the higher Australian dollar and lower contracted prices for coal and iron ore have produced another small downward revision in the estimates for Australian commodity exports in the year to June 30, 2010.
It’s yet another cut in the estimated level of export income from shipments of rural and mining commodities from ABARE, the Australian Bureau of Agricultural and Resource Economics.
“The index of unit export returns for Australian commodities, in aggregate, is forecast to fall by 23.6% this financial year, after estimated rise of 28.8% in 2008-09.
“The main contributing factors to this forecast are sharply lower contract prices for bulk commodities, such as coal and iron ore, and the assumed higher average value of the Australian dollar,” ABARE said in the September report on commodity production and exports to $197 billion in the 2008-09 year.
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ABARE said that energy and mineral export earnings are forecast to fall by 23% to $123 billion in 2009-10, mainly a result of lower contract prices for bulk commodities, including coal and iron ore.
“This updated forecast for the export value of mineral resources represents a downward revision of about $1 billion from the forecast in June.
“At a forecast $123 billion, minerals and energy export earnings in 2009-10 will be the second highest on record,” acting ABARE director, Dr Terry Sheales said in a statement.
The value of energy exports is forecast to drop 36% to about $50 billion in 2009-10 and metals and other mineral export earnings are forecast to fall 125 to about $74 billion in 2009-10.
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.
The latest forecast of farm export earnings in 2009-10 is a downward revision from the $32.5 billion released by ABARE in the June issue of Australian commodities. However, at a forecast $31.1 billion, farm export earnings in 2009-10 will still be about 13 per cent higher than the $27.5 billion recorded in 2007-08.
“Although winter crop production is forecast to increase in 2009-10, an assumed higher average value of the Australian dollar is expected to lead to lower farm export earnings in the short term,” Dr Sheales said.
Agricultural commodities for which export earnings are forecast to rise in 2009-10 include barley, chickpeas, lupins, oats, peas, rice, sorghum, raw cotton and sugar. However, the effects are more than offset by forecast lower export earnings for wheat, canola, wine, livestock and livestock products.
With the NSW government reporting overnight Monday that about 20% of the state’s wheat crop had been damaged by the rapidly returning drought, the forecast for export returns for rural commodities could be sliced even deeper in the December report.
Australian mine production in 2009-10 is forecast to increase by 4.6%, thanks to higher production of iron ore, gold, copper, liquefied natural gas and uranium.