Extreme weather threatens Australian economy
Pastor Dale Morgan
Extreme weather threatens Australian economy
- By Lauren Wilson and Amanda O'Brien
- From: The Australian
- December 03, 2010 11:42PM
The damage to grain harvests could force a revision of the nation's economic growth figures / File
- Record-breaking rain across Australia
- Could put economy into reverse
EXTREME weather is threatening to push the economy into reverse amid fears record-breaking rain in the east and drought in the west will wipe up to $6 billion off bumper grain harvests.
Natural disaster zones have been declared in flood-hit parts of regional New South Wales.
Figures released this week revealed the September-quarter national accounts remained just positive on the back of the booming agricultural sector, which grew 18.5 per cent as it recovered from a decade of drought.
The deluge over the past three months has resulted in most areas of Australia - except drought-ravaged southwest Western Australia - recording their highest spring rainfall, or levels well above average.
The big wet along Australia's eastern and southern agricultural belts is devastating the current winter grain harvest, with rain delaying harvesting and turning prime food-quality wheat worth $300 a tonne into $170-a-tonne wheat suitable only for feed.
There are projections that New South Wales and Victoria could sustain losses to the value of wheat, barley and canola crops of more than $1billion.
In the nation's west, the continuing drought is expected to slash $3bn off farm and farm industry incomes.
The La Nina rainfall pattern is also causing havoc for the coal industry, with the owners of one Queensland mine warning severe weather could put further upward pressure on coal prices.
Australian Bureau of Statistics figures this week showed the economy nosed ahead by a modest 0.2 per cent in the September quarter, helped by substantial growth across the agricultural sector and "strong crop forecasts".
A spokesman for the bureau yesterday confirmed it had used the Australian Bureau of Agricultural and Resource Economics's crop report for the September quarter, which had forecast a "bumper" 40.7 million-tonne crop on the heels of "ideal conditions".
But agricultural economists and experts have indicated those forecasts will have to be revised down by as much as one-third, stripping farmers of billions of dollars of income. ABARE had predicted that NSW would produce a record 14.5 million tonnes of winter crops, while Western Australia's was forecast to be about 9.7 million tonnes, down 20 per cent from the last season.
Global grain prices, already at a two-year high after a drought in Russia, have soared again this week with the persistent rain in Australia ruining crops and fuelling fears of a shortage.
Australian Farm Institute executive director Mick Keogh said the effect of millions of tonnes of sodden crop being downgraded from high-quality milling grade to feed wheat, could push the economy into reverse.