The international cost of severe flooding in Australia is already a consideration as exports of coking coal, sugar and wheat look likely to be severely affected in 2011.
An area larger than France and Germany is underwater in Queensland and mines are flooded, railway lines are cut and many bridges have been damaged.
Australia is the world’s largest exporter of coking coal, which is used for producing steel, and supplies over half the global market. A substantial proportion of that originates in Queensland.
Spot prices for coking coal on the international markets have risen 10 per cent during the past month and traders are predicting an extremely sharp increase over the next few weeks.
There is currently huge concern in Queensland about moving coal from the state’s mines to the export ports. Many links are still under water as rain persists – and more is forecast.
In terms of wheat, Australia is the world’s fourth largest exporter. Queensland produces about 5 per cent of that but the recent storms, at times producing up to 100mm of rain, have damaged crops.
Those exports are particulalry crucial for Indian, Japanese and Bangladeshi food supply.
Initially a bumper harvest was predicted and many farmers forward-sold their crops, but now cannot deliver. The financial penalties as a result may drive some off the land for good.
Australia has also cut its forecast for sugar exports this year by 25 per cent as a result of the flooding.
The damage has contirbuted to a 30-year high for sugar prices and has forced Queensland Sugar, the nation’s biggest sugar exporter, to buy more raw sugar from Brazil and Thailand to meet its orders.
