Australian’s commodity exports are expected to drop by 17% in value during 2009-10 before experiencing a slight recovery, but are unlikely to reach last year’s highs for another five years.
New figures from the Australian Bureau of Agricultural and Resource Economics show that the value of exports is set to drop from $196 billion to $162 billion during 2009-10, which will mark the first reduction of value in six years.
Speaking at the annual ABARE outlook conference, NAB group chief economist Alan Oster said the downturn has just started and has spread to international trade.
“I don’t expect to see global growth really start getting going again until at least the end of this year and more likely the start of next year,” he said.
The mining boom, which was the major driving force behind the country’s last five years of economic expansion, is clearly slowing. Exports of iron ore and metallurgical coal are set to fall from $US34.1 billion to $US27.1 billion, and from $US26.2 billion to $US20.8 billion respectively.
The ABARE has also warned that “negotiated iron ore and metallurgical coal prices are expected to decline for several years beyond 2009”.
Dairy products are also set to fall in value from $2.6 billion to $2.1 billion on the face of global price falls, while the value of wool exports will decline from $2.2 billion to $1.9 billion.
But there is still some good news for the farming sector. Overall farm exports are expected to grow during this year and the next, leaping 4% during 2009-10 to $32 billion.
ABARE executive director Phillip Glyde pins the growth of farming exports to expanded production. Wheat forecasts are expected to grow from $4.5 billion during 2008-09 to $5.8 billion during 2009-10, while production will grow from 21 million tonnes to 22 million tonnes in the same period.
“The farm sector… will provide a much needed confidence boost to the Australian economy,” he said.