Australia is facing a $39 billion cut back in its total commodity exports, according to the latest outlook report from the Australian Bureau of Agricultural and Resource Economics (ABARE).
Released this morning, the report predicted that the total value of commodity exports would fall to $158 billion for the 2009/2010 financial year, down from $197 billion last financial year.
ABARE attributes much of the falling export figures to weaker commodity prices and a stronger Australian dollar.
According to the report, exports of metals and other minerals are forecast to drop by 12% to $74 billion.
Iron ore production is tipped to increase 16% this year, as steel consumption is expected to begin its recovery in late 2009, ABARE said.
“Over the next 15 months, increases in housing construction and automobile production in many countries, and the continuing effects of government investment in steel intensive infrastructure, are expected to underpin increases in steel consumption, particularly in the United States, China and India,” the report said.
But despite the increase production and consumption, ABARE has warned that falling prices will means the value of that iron ore production will fall an expected 20% to $27.4 billion.