THE big mining companies have at last broken through the bottlenecks at the export ports.
And they are achieving big increases in the volume of minerals being shipped.
With farm exports also lifting earnings, total commodity exports will soar 26 per cent to $215 billion next year, according to the Australian Bureau of Agricultural & Resource Economics.
The bureau has upgraded its forecast earnings by $12.5bn since its June review, with both the prices and the export volumes looking better now than they did three months ago.
The bureau's quarterly review of the commodity markets shows production is increasing rapidly from both the resource industry and, with ideal weather conditions, from rural Australia.
Mining and energy production will rise 12 per cent in 2010-11 while farm production will rise 8.1 per cent.
Over calendar 2011, ABARE expects Australia to export 437 million tonnes of iron ore, which is 10 per cent more than this year and a massive 41.4 per cent increase from the level shipped in 2008.
Exports of steel-making coal will be 25 per cent higher than levels of two years ago while shipments of thermal coal, used to generate electricity, will be 13 per cent higher.
The growth in the volume contrasts with the resources boom that preceded the global financial crisis when mining companies were unable to increase shipments to meet the surging demand because of lack of investment in rail and port infrastructure.
The major advanced economies -- the US, Japan and Europe, have been surprising contributors to a strong lift in demand for steel-making commodities this year, with their steel production rising by more than 20 per cent.
Output is expected to rise by between 5 and 10 per cent next year as demand in China and other Asian markets is expected to remain strong.
ABARE says the uncertain outlook for the advanced economies poses a risk to the outlook for prices. However, it believes the big increases in contract prices for major commodities, along with strong markets for gold, will lift the average price for minerals by 24.1 per cent this year.
Three months ago, ABARE forecasts that prices would rise by 19.1 per cent contributed to a massive upgrade in the government's estimated returns from its proposed mineral resources rent tax.
Farm prices are also rising, although by a more modest 5.3 per cent. Three months ago, ABARE was expecting virtually no change in farm prices. Wheat is the star performer among farm exports, with volumes expected to be up by 33 per cent and the value of exports up by 41 per cent.
The upgrade of commodity earnings has been achieved despite the rise in ABARE's estimate for the value of the dollar from US87c to US90c over 2010-11.
