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Weak commodity prices to hits exports



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15 June 1999

Weak commodity prices to hit exports

‘Australian commodity exports are forecast to decline by 2.6 per cent to $63.1 billion in 1999-2000. This is on top of an estimated 3.3 per cent fall in the value of exports in the year just ending’, ABARE’s Acting Executive Director, Dr Stephen Beare, said today when releasing the June issue of Australian Commodities. ‘Falling export prices are the main reason for this decline’, Dr Beare added.

For the sector as a whole, unit export returns for Australian commodities are estimated to have fallen by 5.4 per cent in 1998-99 and are forecast to fall by 5.0 per cent in 1999-2000.

Dr Beare stated that, ‘a slight easing in world economic growth, continuing high levels of supply, and a stronger Australian dollar are the main contributing factors’.

For mineral resources, export earnings are forecast to fall by 4.8 per cent in 1999-2000 because of weak world prices for most minerals and bulk commodities. Despite a price surge in early 1999, average annual prices of most minerals and energy exports are forecast to be lower in 1999, as economic growth in major OECD countries moderates and growth in world

supply continues. However, average prices for Australia's major minerals and energy commodities are forecast to increase significantly in 2000 as economic growth recovers, particularly in Asia.

Farm exports are estimated to be worth $22.6 billion in 1999-2000, slightly up on 1998-99. Prices for farm exports are forecast to decrease by almost 2 per cent, however, this will be more than offset by increased export volumes.

Better world prices are in prospect for some key farm commodities, such as wheat, beef and wool in 1999-2000, despite the impact of a higher Australian dollar. In the case of wheat, the ASW10 pool price is forecast to be up by over 4 per cent to around $188 a tonne in 1999­ 2000; saleyard prices of cattle are forecast to average 2.6 per cent higher than in 1998-99; and

the eastern market indicator for wool is forecast to rise 3 per cent from its 1998-99 low.

For further information, Terry Sheales on (02) 6272 2054 or email on tsheales@abare.gov.au

For copies of Australian Commodities, contact Publication Orders on 1800 244 129.

For general media enquiries, contact Margaret Day on (02) 6272 2260 or on 018 487 825.

ABAREInnovation in Economic ResearchGPO Box 1563, Canberra, ACT, Australia, 2601 · Telephone: +61 2 6 2 7 2 2 0 0 0 · Facsimile: +61 2 6 2 7 2 2001 · http://w w w .abare.gov.au