Severe flooding disrupts grain transportation in Australia

SINGAPORE (Reuters) – Floods in Australia’s Queensland state could disrupt grain supply for weeks, top handler GrainCorp Ltd. said Jan. 2.

The disruptions could further delay the transportation to market of the country’s waterlogged wheat crop.

Even ahead of the latest deluge, Australia’s wettest spring on record had damaged the country’s crop quality, stoking supply concerns and pushing up global wheat prices.

U.S. wheat futures rose more than one percent in early Asian trade Jan. 2.

“We are unable to move anything by rail or, of course, road,” said David Ginns, corporate affairs manager at GrainCorp.

He said transporting grain to port elevators from inland areas had effectively ceased, and the domestic distribution network had also been affected.

Queensland floods have renewed concerns over wheat supplies, after large volumes of prime quality crop were damaged by rain at the end of 2010.

Ginns said the state would likely account for one million tonnes, or about five percent of the country’s total output this year.

Crop analysis firm Australian Crop Forecasters expected a total harvest of 24.4 million tonnes, compared with 21.7 million tonnes last year.

However, it has predicted that 10 million tonnes of this would be downgraded from milling wheat to animal feed. Australia typically produces little feed quality wheat.

Large parts of Australia’s coastal northeast have disappeared under flood waters in a spreading disaster that has brought some of the highest floods on record and forced thousands from their homes.

“We can’t move anything by rail, full stop,” Ginns said. “We have either got trains that are marooned out in western areas and cannot come to the coast, or trains that are on the coast and cannot go to the west.”

Still, there was unlikely to be any major impact on stored grains, he said, because much of the grain in affected areas was stored in bunkers, surrounded by tarpaulins secured in “gas-tight” ways, which also rendered them fairly waterproof.

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