Conditions for exporters to improve in 2014

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The National Australia Bank (NAB) has predicted Australian agriculture sector exports will perform strongly in 2014 as production conditions improve

Conditions for exporters to improve in 2014
NAB predicts agriculture exports such as dairy, beef and lamb are expected to increase in the coming year.

Better production conditions and the falling Aussie dollar will see dairy, beef and lamb exports increase in 2014 the most, followed by exports of grain and sugar.

That’s according to the latest National Australia Bank (NAB) Rural Commodities Wrap which predicts, in part, more favourable conditions for several commodities in 2013-14 arising from the declining Australian dollar.

NAB Agribusiness General Manager Khan Horne says NAB forecasts the Australian dollar to gradually fall to 0.86c US by the end of 2014.

"Dairy export prices are likely to average 25 per cent higher in AUD terms, due to elevated prices globally and softer AUD," Horne says.

"This is expected to see the total value of exports rise by 15 per cent, despite a decrease in total volume as marginally higher production is diverted to the domestic market."

Overall, beef and veal production is forecast to rise by 2.5 per cent on last year, and export volume by 5 per cent, driven by continued demand from China and Southeast Asian countries. 

However, the average price for 2013-14 is expected to be 5 per cent lower than the year prior, with climatic conditions continuing to see high turnoffs in the northern production zone.

"In contrast, lamb prices are set to average 13 per cent higher as supplies tighten more quickly on the back of the highest slaughter rate in 40 years in 2012-13 and lower lambing percentages," Horne says.

Looking at grains, Horne adds positive global conditions have boosted yields and placed downward pressure on grain prices, including record US corn crops, strong soybean production in Brazil and a general global recovery in wheat production.

"In Australia, grains are experiencing a strong season, with this year’s wheat crop forecast to reach 24.7 million tonnes and coarse grains forecast to reach 12 million tonnes, driven by growth in barley and sorghum," he says.

Among other crops, sugar exports in 2013-14 are likely to be in line with 2012-13 but earnings are forecast to be slightly lower due to weaker global prices. 

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