By Lachlan Colquhoun
Please respect FT.com's ts&cs and copyright policy which allow you to: share links; copy content for personal use; & redistribute limited extracts. Email ftsales.support@ft.com to buy additional rights or use this link to reference the article - http://www.ft.com/cms/s/0/e6eee934-43be-11e0-b117-00144feabdc0.html#ixzz1FLbrGNK5
Strong demand from China and India will extend Australia’s commodities boom, more than cancelling out damage from extreme weather and easing prices, according to the closely watched quarterly report from the national agricultural and resources forecaster.
The Australian Bureau of Agriculture and Resource Economics and Sciences forecast on Tuesday that the country’s resources and commodity exports would deliver A$251bn (US$255bn) in national export income in the financial year to 2012, a rise of 14 per cent, following a 24 per cent gain in 2010-11.
Strong demand from China and India will extend Australia’s commodities boom, more than cancelling out damage from extreme weather and easing prices, according to the closely watched quarterly report from the national agricultural and resources forecaster.
The Australian Bureau of Agriculture and Resource Economics and Sciences forecast on Tuesday that the country’s resources and commodity exports would deliver A$251bn (US$255bn) in national export income in the financial year to 2012, a rise of 14 per cent, following a 24 per cent gain in 2010-11.
Please respect FT.com's ts&cs and copyright policy which allow you to: share links; copy content for personal use; & redistribute limited extracts. Email ftsales.support@ft.com to buy additional rights or use this link to reference the article - http://www.ft.com/cms/s/0/e6eee934-43be-11e0-b117-00144feabdc0.html#ixzz1FLbvsbKf
Exports will remain at those levels in real terms for the next four years, Abares projected. In 2010-2011 dollar terms, Australia’s commodity exports are expected to be worth A$254.8bn by 2015-16.
The recent flooding in the eastern state of Queensland and from cyclone Yasi that hit northern Queensland in February would cost A$2.3bn in agricultural production this year, said Abares.
Cyclone Yasi itself inflicted A$300m damage. The biggest effect would be on the production of cereals, sugar, fruit and vegetables, cotton and grain.
The Abares projections are more bullish than the assessment of Reserve Bank of Australia governor Glenn Stevens, who said last month that the RBA was forecasting steeper falls in commodity prices than are other observers.
Mr Stevens noted that the current boom is already longer than any in Australia since Federation in 1901.
Stephen Walters, chief economist at JPMorgan in Sydney, said the forecasts pose a dilemma for the RBA, which held official interest rates steady on Monday. With the commodities sector booming and consumer demand still weak, the RBA has a “balancing act” to perform on monetary policy, he said.
Abares forecast that exports of iron ore, Australia’s biggest-earning export commodity, would increase 5 per cent this year to 425 tonnes and could reach 600m tonnes by 2016.
Thermal coal volumes are forecast to rise by an annual rate of 11 per cent by 2015-16 to 242m tonnes, representing about 25 per cent of world production. China and India are set to be the main importers, alongside steady demand from Japan, Korea and Europe.
On the farm, rising food prices and poor grain harvests in Russia and the Baltic states are likely to drive exports up 9 per cent to A$31bn this financial year, A$1bn higher than previous forecasts, said Abares.
The report said: “Agricultural commodities for which export earnings are forecast to increase in 2011-12 include barley, oilseeds, rice, grain sorghum, raw cotton, sugar, wine, beef and veal, sheep meat and wool”.
Abares is assuming an average value for the Australian currency of about US$0.97 in the next few years, before “moderating gradually” to an average of US$0.90 by 2015-6.
It said: “While the Australian dollar is assumed to remain relatively strong in the short term, significant volatility in the exchange rate is likely to occur”.
Exports will remain at those levels in real terms for the next four years, Abares projected. In 2010-2011 dollar terms, Australia’s commodity exports are expected to be worth A$254.8bn by 2015-16.
The recent flooding in the eastern state of Queensland and from cyclone Yasi that hit northern Queensland in February would cost A$2.3bn in agricultural production this year, said Abares.
Cyclone Yasi itself inflicted A$300m damage. The biggest effect would be on the production of cereals, sugar, fruit and vegetables, cotton and grain.
The Abares projections are more bullish than the assessment of Reserve Bank of Australia governor Glenn Stevens, who said last month that the RBA was forecasting steeper falls in commodity prices than are other observers.
Mr Stevens noted that the current boom is already longer than any in Australia since Federation in 1901.
Stephen Walters, chief economist at JPMorgan in Sydney, said the forecasts pose a dilemma for the RBA, which held official interest rates steady on Monday. With the commodities sector booming and consumer demand still weak, the RBA has a “balancing act” to perform on monetary policy, he said.
Abares forecast that exports of iron ore, Australia’s biggest-earning export commodity, would increase 5 per cent this year to 425 tonnes and could reach 600m tonnes by 2016.
Thermal coal volumes are forecast to rise by an annual rate of 11 per cent by 2015-16 to 242m tonnes, representing about 25 per cent of world production. China and India are set to be the main importers, alongside steady demand from Japan, Korea and Europe.
On the farm, rising food prices and poor grain harvests in Russia and the Baltic states are likely to drive exports up 9 per cent to A$31bn this financial year, A$1bn higher than previous forecasts, said Abares.
The report said: “Agricultural commodities for which export earnings are forecast to increase in 2011-12 include barley, oilseeds, rice, grain sorghum, raw cotton, sugar, wine, beef and veal, sheep meat and wool”.
Abares is assuming an average value for the Australian currency of about US$0.97 in the next few years, before “moderating gradually” to an average of US$0.90 by 2015-6.
It said: “While the Australian dollar is assumed to remain relatively strong in the short term, significant volatility in the exchange rate is likely to occur”.
No comments:
Post a Comment