The mining commodity price squeeze was making headlines again on Tuesday as iron ore fell to a five-year low and BHP Billiton announced that 700 Bowen Basin coalmining workers would go, but the miners are not alone in feeling the pressure.
The price of wheat, Australia's sixth biggest export, has fallen by about 31 per cent since May, and is at a four-year low. The price of corn, a key industrial food and drink-making raw material, has fallen by 28 per cent since mid August, and is also at four-year lows. The price of sugar has fallen by 25 per cent since mid-year, and soybean prices have fallen by 39 per cent.This is certainly a sector which will be cheering for a lower $AUD. There was also an update on the sector from ABARE: Agricultural commodities: September quarter 2014. This includes commentary and forecasts for sugar, which is of most significance to FNQ:
Australian raw sugar exports are forecast at 3.3 million tonnes in 2014–15, around 6 per cent higher than in 2013–14. This forecast reflects an expected increase in supplies available for export, resulting from higher production. Based on the forecast higher export volumes and lower world prices, the value of Australian sugar exports is forecast to remain largely unchanged at around $1.4 billion in 2014–15.