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Impact on Rural exports of devaluation of the Australian Dollar



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STATEMENT BY

THE MINISTER FOR PRIMARY INDUSTRY

CANBERRA

IMPACT ON RURAL EXPORTS OF DEVALUATION OF THE AUSTRALIAN DOLLAR

Rhe Australian Minister for Agriculture, Senator Ken Wriedt, today predicted that the Government's decision to devalue the dollar could raise rural export earnings in 1974-75 by a further $250-$300 million.

This followed-a fresh assessment of export earnings by the Bureau of Agricultural Economics which recently estimated rural export earnings for 1974-75 at $3,763 million compared with $3,537 million in 1973—74.

Senator Wriedt said that the benefits of the dollar devaluation would extend beyond 1974-75.

In regard to wool,'the Minister said that devaluation was likely to lead to buyers purchasing larger quaniities, rather than to an immediate rise in auction prices; but later in the season when demand was predicted to firm and

prices rose above the 250 cents floor price, then the ยท impact of the devaluation decision was expected to lead to even higher prices. In addition, devaluation should reduce the quantity of wool held by the Australian Wool Corporation at the end of the season.

Despite the large export availability of Australian wheat this season the world price for wheat is unlikely to be affected by this decision, and export- returns from Australia should rise by the full extent of the 12%, less

the higher freight rate in terms of Australian currency. Other grains and sugar are in a similar situation.

The Minister said that world prices for dairy products are presently firm and the decision of New Zealand a major competing exporter, to devalue also is unlikely to immediately affect world prices. Consequently, Australia's exports of dairy products should gain the full benefit of the 12% devaluation, less, the rise in freight charges.

The favourable impact of the devaluation decision on the exports of beef will be affected by the existence * of import embargoes in the EEC and Japan. Nevertheless, .

PRESS RELEASE P R IM A R Y B IM D U S T R Y

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higher returns in terms of Australian dollars could be expected from exports to the U.S. The U.S. market is presently vzeak . and the effect of the devaluation may be in terms of an increased volume of shipments.

The markets for dried vine fruit and canned fruit are firm and the exports returns for these products should rise by the extent of the 12% devaluation. This is because marketing arrangements enable the Boards to maintain their

selling prices in overseas markets and consequently receipts in terms of Australian dollars should rise.

Apples and pears from this season's crop have ' already been sold.

Canberra, 25 September 1974