Queensland floods hit cotton the most : ANZ


BRISBANE (Commodity Online) : Devastating floods in Australian Province of Queensland could potentially lead to major production losses for cotton and sugar, but will have limited impact on wheat and beef exports, Australia and New Zealand Banking Group (ANZ.AU) said Friday.
Queensland has suffered the worst flooding in more than 50 years in recent weeks, destroying infrastructure, housing and business activities. Mining – particularly Australia’s A$50 billion coal export sector – was the worst hit, but agricultural production has also been affected.
The state is a major global supplier of sugar, cotton and beef.
The full impact of the floods on cotton production in the state is difficult to quantify at this stage, ANZ said in a report. Farmer lobby AgForce had earlier estimated cotton crop losses at more than 100,000 metric tons following the floods.
That would represent a 10% plus reduction in the size of the crop to be harvested around April, officially estimated at 900,000 tons. But even under this scenario, Australia’s cotton output this year will still double on year, ANZ reported. Queensland typically accounts for 25%-35% of the national cotton output.
The sugar industry has previously reported a reduction raw sugar production as rains through the second half of 2010 delayed the harvest. Some 20% of the cane crop was left standing when the harvest ended before Christmas, resulting in a 20% decline in raw sugar production to around 3.6 million tons in the fiscal year to June 30, and a corresponding decline in export availability.
Following rains and flooding, some industry experts have said production is unlikely to recover even in 2011.
As for wheat, Queensland typically produces less than 10% of the national crop, and produced even less – around 5% – this crop year, with harvest all but completed before the floods arrived. Losses to the wheat crop will be "minimal at an aggregate level," ANZ said.
However, the issue now is the industry’s "inability to move grain inland to the Brisbane Port," where GrainCorp Ltd. (GNC.AU) operates the state’s major grain export terminal, ANZ said. "Movement of grain in Queensland has already been restricted for the last two weeks and (that) is expected to last at least another fortnight," it said.
Even so, with a worst case scenario, this disruption would still represent less than 1.5% national wheat exports, according to ANZ.
GrainCorp Corporate Affairs manager David Ginns said the Brisbane terminal still can’t receive grain by rail from inland areas, but trucks are hauling it at a much reduced rate. But few trucks are available to transport wheat in Queensland as many are still in Southern Australia, hauling in the rain-delayed harvest there.
Further flooding in Southern Queensland – expected in the coming days – will also disrupt transport from silos in that area, he said.
As for beef exports, while Queensland accounts for up to half the national output, actual livestock losses will be minimal, the report said. With January typically a low point for exports, "the impact on Australian beef exports is expected to be minor and short-lived," ANZ said.

(Source: http://www.commodityonline.com/news/Queensland-floods-hit-cotton-the-most–ANZ-35412-3-1.html)