Australian commodity exports are expected to fall by 4% to $87 billion this financial year due to the impact of drought, a leading rural economic forecaster says.
Releasing the March issue of
Australian Commodities, ABARE executive director Dr Brian Fisher says the drought will have a direct and indirect effect on economic growth.
"The drought is estimated to reduce the rate of economic growth in Australia in 2002-2003 by around 0.75 percentage points from what would have otherwise been achieved," Fisher says.
"Commodity export earnings are forecast to remain flat in 2003-2004, partly because of the carryover effect of drought on rural exports."
The main points are:
- earnings from farm exports are forecast to be around $27 billion in this and the next financial year ($31 million 2001-2002)
- crop exports forecast to fall 20% to $12.7 billion
- livestock exports expected to fall 6% to $14.4 billion
- minerals and energy exports expected to be $56.2 billion in 2002-2003 and $56.4 billion in 2003-2004
- farm export prices are expected to decline by 0.9% in 2003-2004, following a forecast 0.6% rise in 2002-2003.
The latest National Farmers' Federation/Westpac
rural commodity index has shown an increase of 4.7% during February, mainly due to a 25% rise in beef prices as producers look to restock following rain.
"The rains also put pressure on crop prices in anticipation of pasture growth and good crops later this year," NFF economics chairman Charles Burke says.
"As a result, wheat, cotton and barley prices all fell during the month. Sugar prices rose largely for international reasons."
However, the February rains do not mean the drought is over and recovery will take a number of years.
"Farmers are being hit by a 'triple whammy', with incomes forecast to be halved, while the rising Australian dollar and increasing fuel prices are also cutting farm incomes heavily," he says.