Australia farm exports may increase two percent

Australia's farm exports may increase two percent in the year to June 30, 2010, helped by relatively favourable crop conditions and a recovery from the global recession, according to the Australian Bureau of Agricultural and Resource Economics (ABARE).

Total farm exports may total A$32 billion (US$26 billion), said ABARE chief commodity analyst Jammie Penm.

Increased grain demand may be offset by the strengthening Australian dollar, which would reduce earnings on export sales, Penm said.

Australia may produce more wheat than previously predicted after rain lifted crop prospects, the National Australia Bank Ltd. said July 22.

Penm said Australia's wheat production will increase in the next financial year, but a El Nino weather pattern may become a risk for Australian farming conditions later this year.

ABARE last month forecast Australia's wheat crop to increase 2.7 percent to 21.9 million tonnes in the year ending June 30, 2010, with exports rising 14 percent to 14.6 million tonnes. Barley production is seen to increase 13 percent to 7.7 million tonnes, with exports rising 12 percent to 4.4 million tonnes.

Grain prices in Australia are likely to remain volatile as the market continues to adjust to the deregulation, according to Michael Iwaniw, managing director of ABB Grain.

Australian agriculture minister Tony Burke also said the government could not close its eyes to increasing the use of GM crops, which may be part of the country's plan to increase farm productivity in the next three to five years.