Australia’s export slump could be turning up, following the release of the latest look at commodity export income from the Australian Bureau of Agricultural and Resource Economics, the federal government’s main commodity forecasting group.

The December report reveals that forecast earnings from Australia’s commodity exports are expected to be $163 billion in the year to June 30, 2010.

The rise is despite the influence of the higher value of the Australian dollar and lower prices for some farm exports, and the impact of drought.

The latest estimate is up 3.7% from the $158 billion estimate in the September forecast from ABARE.

While that will be down 18% from 2009-10, it represents the first upturn in more than a year of forecasts as the world economy and demand for iron ore, coal and other commodity picks up, or accelerates in the case of iron ore and coal.

Much of the extra income should come come in the first half of next year. It will take a bit of pressure off the trade account, which saw a sharper-than-expected fall in October and a big drop away in the three months to September.

The rise from the September forecast is in the upturn for mineral and energy exports, which are now forecast to rise $6 billion, or 4.8% to $129 billion from the September figure of $123 billion. The latest forecasts for total export income from commodities and for energy and minerals, are also higher than those made in the June quarter by ABARE.

The increase in the December estimates could have been higher but for another reduction in the forecast income from farm exports as the higher value of the Australian dollar, drought and lower world prices (wheat mainly) have an impact.

ABARE said in today’s release that the “value of farm exports is forecast to fall by 6% to $30 billion in 2009-10, following a significant rise of 16% to $32 billion in 2008-09.

“The forecast decline in farm export earnings in 2009-10 mainly reflects the adverse effects of a significantly higher Australian exchange rate, especially against the US dollar, and a downward revision to winter crop production in the current season,” ABARE acting-director Dr Terry Sheales said a statement.

“The latest forecast of farm export earnings in 2009-10 represents a downward revision from the $31.1 billion forecast released by ABARE in September. However, at a forecast $30 billion, farm export earnings in 2009-10 will still be around 9% higher than the $27.5 billion recorded in 2007-08.”

ABARE said higher export earnings are expected from include raw cotton, sugar, chickpeas, peas and rice. “However, the effects of these increases are forecast to be more than offset by lower export earnings for wheat, barley, canola, livestock and livestock products,” it said.

While there has been an improvement in the expected earnings from energy and minerals exports in the 2010 financial year, the final figure will still be down 20% from 2009. But the September forecast had the fall closer to 23%, so the improvement is now quite clear.

“The combined effect of lower bulk commodity contract prices, including for coal and iron ore, and an assumed stronger Australian dollar is expected to more than offset the positive effect on earnings of forecast higher export volumes in 2009-10,” Dr Sheales said.

ABARE said that the value of energy exports is forecast to fall by 31% to about $54 billion in 2009-10. In September energy exports were forecast to be 36% lower at $50 billion.

For metals and other minerals, export earnings are forecast to decline by 10% to about $75 billion in 2009-10. That’s better than the 12% fall to $74 billion in the September outlook.

Australian mine production is forecast to rise by 7% in 2009-10, with increases in energy commodities and metals and other minerals outputs.

Total earnings from Australia’s commodity exports are forecast to fall by 18% to $163 billion in 2009-10, still the second highest on record, after the huge 33% surge to $197 billion in 2008-09.