SYDNEY, Aus. (Reuters) — Wildfires across Australia’s west coast are likely to destroy nearly four percent of the grain production in the country’s largest crop producing state.
The news supported global wheat prices in an amply supplied world market.
Most of Western Australian grain production at this time of the year is wheat, and Australia is the world’s fourth largest exporter of the grain. As a result, any damage to its production would buoy benchmark futures that hit two-month lows in mid-November.
Three major fires in Western Australia had burned 740,000 acres and killed four people as of mid-November.
“With the fires still burning, we don’t get a full picture of what the damage will be. However, it is very likely that much of the areas burned will be grain farms,” said a Western Australia-based grain trader.
Nearly four percent of Western Australian production would likely be lost if all the area burned was grain producing regions, traders added.
Slightly more than 20 million acres were devoted to grain production in the state in 2015-16, according to the Australian Bureau of Agricultural and Resource Economics and Sciences.
State officials have confirmed the number of acres burned by the recent fires but did not say how much of it was farmland.
“There was an inland trough that brought hot, dry and windy conditions, creating these catastrophic fire conditions,” said Darryl Vink, forecaster at the Bureau of Meteorology.