Fed: Commodity exports worth $120bln = 2

AAP General News (Australia)
12-12-2005
Fed: Commodity exports worth $120bln = 2

ABARE's quarterly Australian Commodities report, released today, tips iron ore exports
earnings to increase by a whopping 72 per cent in 2005-06, raking in almost $14 billion.

The value of coal exports is likely to rise 64 per cent to $17.7 billion on the back
of higher prices.

Gold exports are expected to fall slightly during the year, but a strong gold price
will increase export earnings for the precious metal by 14 per cent to $6.3 billion.

The price outlook for the minerals and energy sector is mixed, ABARE said, with oil,
nickel and copper prices easing but iron ore, zinc and aluminium rising.

"Growth in world demand for most of the major minerals and energy commodities is expected
to ease from current levels in 2006, reflecting weaker assumed growth in global industrial
activity," Dr Fisher said.

As forecast in ABARE's recent crop report, the easing of drought conditions in eastern
Australia is expected to produce a bigger than expected winter crop of around 38 million
tonnes, up 20 per cent on 2004-05.

For livestock, lamb production - currently at a record high - could increase further
if good seasonal conditions persist through summer, ABARE said.

The struggling wool market, where prices hit a six-year low in November, is expected
to remain under pressure.

ABARE said demand for the fibre would continue to fall, with prices averaging $6.70kg
in 2005-06 - down 10 per cent on last year.

Beef prices are tipped to fall over the year on the assumed re-entry of north American
beef to the Japanese and Korean markets.

Australia has snared about 90 per cent of the lucrative markets since US and Canadian
beef was locked out because of cases of mad cow disease.

Australian beef exports are forecast to drop 10 per cent to about 380 tonnes.

AAP rp/mon/sd

KEYWORD: COMMODITIES 2 CANBERRA

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