Australia agriculture sector gloomy on exports-bank

SYDNEY, Feb 12 (Reuters) - Confidence in Australia's agriculture sector on the outlook for exports slumped in the last three months of 2008 in the face of the global economic slowdown, a private bank survey showed on Thursday.

National Australia Bank's (NAB) survey of 100 agribusinesses showed confidence in export sales had dropped to an index reading of minus 22 in the quarter to December, from plus 19 in the three months to September.

The survey index is calculated by measuring the difference between survey respondents with a positive view and those with a negative view about prospects for the three months ahead.

NAB said confidence on the outlook for major commodities such as wheat and sugar declined as suppliers worried about falling prices in the face of weaker demand and the size of crops.

The survey found confidence in the outlook for wheat dived 31 points from the previous quarter to a reading of minus 3 as limited spring rain in some areas and too much in other areas resulted in a downgrade to yield prospects for the 2008/09 crop. Confidence about prospects for the sugar industry fell 9 points to a reading of minus 5 due to a reduction in the area planted to sugar as more acres were turned over to alternative crops offering higher returns.

Expectations of lower yields as flooding damaged crops in the tropical state of Queensland also eroded confidence in the sugar industry.

Cotton improved its position, with confidence about the industry's prospects rising 9 points to a reading of minus 7, helped by stable prices in Australian dollar terms and good rainfall in key growing areas during the quarter.

"Given the positive start to the season, optimistic forecasts for production are at around 1.4 million bales," NAB economists said in a statement accompanying the survey.