“While farm sector exports will be adversely affected by the drought, higher export earnings from mineral resources will continue to underpin commodity sector performance,” ABARE executive director Phillip Glyde said.

The value of Australia’s minerals and energy exports is forecast to be around $111 billion in 2006-07, a rise of 20% from $92 billion in 2005-06.

The price outlook across mineral resources remains positive, reflecting continued strong world demand and modest growth in supply.

Following significant rises in 2005-06, further price increases in 2006-07 are forecast for many mineral commodities, including iron ore, gold, aluminium, nickel, copper and zinc, ABARE said.

In addition to higher prices, the volume of Australian mineral resources exports, in aggregate, is forecast to rise markedly in 2006-07.