"The strength of Australia's minerals and energy exports continues to underpin commodity sector performance," Dr Fisher said.

The value of Australia's minerals and energy exports is forecast to be around $110 billion in 2006-07, compared with an estimated $91.8 billion in 2005-06.

The price OUTLOOK across minerals and energy commodities remains positive, reflecting only modest world supply growth. Following significant rises in 2005-06, further price increases in 2006-07 are forecast for many minerals and energy commodities including gold, LNG, aluminium, nickel, copper and zinc. In addition to higher prices, the volume of Australian mineral resources exports, in aggregate, is forecast to rise markedly in 2006-07.

The value of Australia's energy exports is forecast to increase from $41.2 billion in 2005-06 to about $48 billion in 2006-07. For metals and other minerals, export earnings are forecast to rise by 22 per cent to around $62 billion.

In the farm sector, export earnings are forecast to be around $29 billion in 2006-07, a rise of 3.7 per cent from an estimated $28.3 billion in 2005-06. Agricultural commodities for which export earnings are forecast to increase in 2006-07 include wheat, barley, canola, rice, lamb and live sheep.

For farm commodities as a whole, the index of unit export returns is forecast to decline slightly in 2006-07, following a rise of 2.0 per cent in 2005-06.

"Although world indicator prices are forecast to average higher in 2006-07 for wheat, corn, soybeans and cotton, the effects are expected to be more than offset by lower prices for beef, wool and dairy products", Dr Fisher noted.