Severe flooding in Northeast Australia has severely harmed the agriculture sector of the state of Queensland with damage estimates exceeding $1 billion in production lost to the natural disaster, according to media reports. Flooding and consequences are expected to last for several more weeks.
Commodities such as wheat, coal and sugar have suffered. Twenty percent of the sugarcane harvest for 2010 has been abandoned and the early stages of crops for the 2011 season were submerged by water. Three-quarters of the state's coal fields no longer are in operation. About half of the crop of the globe's fourth largest exporter of wheat has been destroyed.
"Given the scale and size of this disaster, and the prospect that we will see waters sitting potentially for a couple of weeks, we will continue to have major issues to deal with throughout January," Queensland premier Anna Bligh said on local radio late Monday.
Australia's government has intervened and the United States and New Zealand also have offered assistance and aid.
The State of Queensland will "need to buy more raw sugar from rivals Brazil and Thailand to meet sales commitments because of drenched canefields," according to Canegrowers, an industry group.
This material is conveyed as a solicitation for entering into a derivatives transaction.
This material has been prepared by a Daniels Trading broker who provides research market commentary and trade recommendations as part of his or her solicitation for accounts and solicitation for trades; however, Daniels Trading does not maintain a research department as defined in CFTC Rule 1.71. Daniels Trading, its principals, brokers and employees may trade in derivatives for their own accounts or for the accounts of others. Due to various factors (such as risk tolerance, margin requirements, trading objectives, short term vs. long term strategies, technical vs. fundamental market analysis, and other factors) such trading may result in the initiation or liquidation of positions that are different from or contrary to the opinions and recommendations contained therein.
Past performance is not necessarily indicative of future performance. The risk of loss in trading futures contracts or commodity options can be substantial, and therefore investors should understand the risks involved in taking leveraged positions and must assume responsibility for the risks associated with such investments and for their results.
Trade recommendations and profit/loss calculations may not include commissions and fees. Please consult your broker for details based on your trading arrangement and commission setup.
You should carefully consider whether such trading is suitable for you in light of your circumstances and financial resources. You should read the "risk disclosure" webpage accessed at www.DanielsTrading.com at the bottom of the homepage. Daniels Trading is not affiliated with nor does it endorse any third-party trading system, newsletter or other similar service. Daniels Trading does not guarantee or verify any performance claims made by such systems or service.