[Australia] Exports Tipped to Surge 30%

[Australia] Exports Tipped to Surge 30%
(The Age, Melbourne – Darren Gray)

March 4, 2008 – The value of Australia's key commodity exports of minerals, energy and agricultural products is tipped to soar next financial year to a record $189 billion – a substantial 30% jump on estimated export earnings this financial year – as booming demand continues in China and elsewhere in Asia.

The staggering export forecast was released in Canberra yesterday by Australia's key agricultural economics forecaster, ABARE, which found no immediate major threat on the horizon to the boom in exports of Australian minerals and energy commodities.

Iron ore is tipped to be the nation's largest export commodity in 2008-09, with ABARE forecasting the total value of these exports to jump 61% to $32.5 billion, followed by metallurgical coal (coking coal), which is tipped to jump a whopping 97% to $28 billion, and thermal coal, tipped to jump 80% to $14.6 billion.

The executive director of ABARE, Phillip Glyde, said the Australian minerals and energy sector was enjoying an unprecedented golden era. In the past, it had enjoyed booms, but the booms had then been followed by troughs. But Mr Glyde said that this time around, there were no troughs on the horizon.

"This is unprecedented around the world and it's basically driven by China's economic growth and growth in Asia more broadly," Mr Glyde told The Age. ABARE predicts that the juggernaut of the Chinese economy "will continue to drive growth in energy and minerals markets over the outlook period to 2013".

China's soaring demand for minerals and energy is being propelled by sustained high levels of economic growth – tipped to be 9.7% this year and 9.5% next year – its continued industrialisation and its rapid urbanisation.

While the forecasts from ABARE are more great news for mining and energy companies and for the resource-rich states, in particular Western Australia, it did highlight some hiccups along the way – warning that minerals and energy projects "will continue to be affected by labour and equipment supply difficulties, high project costs and long lead times".

ABARE's Australian Commodities, March Quarter 2008 report also predicts substantial growth for agricultural exports next financial year, up by 18% to $31.4 billion. Wheat is forecast to be the biggest agricultural export earner, tipped to bring in a relatively modest $4.7 billion, which ranks it 10th in the export earnings rankings for major commodities.

Beef/veal is forecast to be the next best performed segment in agriculture in 2008-09, with $4.3 billion in forecast export earnings. The dairy and wine segments are also tipped to perform well next financial year, with dairy generating exporting export earnings of $3.8 billion (up 6%, attributed to higher incomes and a growing taste for dairy produce in China and South-East Asia), and wine $3.4 billion (up 7%).

The minerals resources sector is tipped to export $153.4 billion in 2008-09 – roughly five times the value of exports from Australian agriculture.