Australian Farm
Commodities Hurt By Global Crisis -Rabobank
Agriculture Online
8:32 PM, November 11, 2008
exports softened in October as a
result of the global financial crisis, but the
impact locally has been moderated
by a weaker currency, Rabobank
reported in a monthly agribusiness
review issued Wednesday.
In particular,
prices for grains, dairy, beef, lamb, wool and cotton - all
major exports from
magnitude of the collapse in global
confidence, the bank reported.
A weaker Australian
dollar helped offset the falls in most export commodity
prices but continues to have the
reverse effect on farm input prices, it said.
At 0100 GMT, the
Australian currency was quoted around US$0.66, down from
US$0.80 Sept. 30 but up from an Oct. 27 low of US$0.60.
Rabobank
said volatility in markets continued in October amid a growing
realization that the financial
crisis will "inevitably lead the developed world
into recession and see a
significant slowing in key developing economies in
2009."
Looking at key Australian
farm exports, the bank said beef retailers and food
service companies in key export
markets are holding back from purchasing
significant quantities as they wait
to see how consumer demand will unfold.
Beef sales to
October as buyers faced currency and consumer uncertainty,
it said.
"Global dairy
market fundamentals have also soured," with prices of products
falling between 7% and 16% on month
in October in U.S. dollar terms, it said.
Demand appears
stagnant, particularly in developing countries, as consumers
rein in purchases in the face of
falling incomes, weaker markets, extreme
uncertainty about the economic
outlook and still high retail prices, it said.
In some dairy
markets, trade has been disrupted by an inability of sellers to
cover buyer risk, further reducing
shipments to key destinations, it said.
"With (dairy) supply expected to continue to expand in
coming months, and
demand to remain weak, further
downside risks for the market remain
significant."
As for cotton and
wool, a slowing demand for textiles and apparels is putting
downward pressure on prices, it
said.
-By Ray Brindal, Dow Jones Newswires
agriculture.com