Fed: Commodity exports up on back of low dollar: ABA

AAP General News (Australia)
12-18-2001
Fed: Commodity exports up on back of low dollar: ABA

By Shane Wright

CANBERRA, Dec 18 AAP - Australian farmers and miners are set to enjoy another good
year on the back of the low dollar, the nation's chief forecaster said today.

The Australian Bureau of Agricultural and Resource Economics (ABARE), in its latest
snapshot of the nation's primary industries, said commodity exports would be worth $90.5
billion this financial year.

It said the farm sector would enjoy the biggest boost, growing to $30.9 billion in
exports from $29.4 billion last year.

The $1.5 billion improvement more than makes up for falls in earnings from the minerals
sector, which is expected to drop to $55.6 billion from $56.4 billion, and the energy
sector which will drop $900 million to $25.7 billion.

One of the biggest success stories is expected to be the dairy sector which only 12
months ago suffered falling production as farmers walked off their properties because
of industry deregulation.

ABARE said the dairy sector should enjoy a seven per cent improvement in prices while
total exports will climb 20 per cent to $3.6 billion.

The bureau's executive director, Brian Fisher, said the fall in the dollar was more
than making up for declining demand caused by the global economic slowdown.

"A relatively weak Australian exchange rate, especially against the US dollar, is expected
to largely offset the adverse effects on earnings of lower commodity prices on world markets,"

he said.

ABARE said Australian cattle saleyard prices should climb 17 per cent, while lamb (up
14 per cent) and mutton (up 17 per cent) would all make strong gains.

In all three areas, demand was likely to be soft but the low dollar meant markets could
be found across the globe.

On the down side, ABARE is tipping falls in wool and cotton prices as the economic
slowdown eats into world demand.

Cotton producers are expected to cut production by up to 23 per cent, while exports
are tipped to drop 31 per cent to $1.4 billion.

The total value of farm production is expected to increase 16.3 per cent, following
on from a 52 per cent increase in 2000/2001.

The economic slowdown is expected to eat into the strong gains made by the minerals
and energy sector, although again the low dollar should keep profits up.

The value of crude oil exports, which skyrocketed last year on the back of high prices,
is expected to drop 30.3 per cent, while the value of natural gas and LPG exports is also
tipped to fall.

Coal production is expected to climb three per cent, and higher world prices should
boost its export value 22.8 per cent to $13.2 billion.

Apart from coal, exports of gold, iron ore, lead and manganese are expected to climb
this financial year.

AAP sw/daw/ph/de

KEYWORD: ABARE NIGHTLEAD

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