Flooding in Australia affects global commodity prices

Australian Flood -- Emergency personnel patrol the flooded Bruce Highway by boat after the Fitzroy River broke its banks and inundated much of Rockhampton.

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BOB MOON: Prices for some global commodities have spiked as much as 20 percent in recent days, as flooding continues to ravage northern Australia. As waters recede in some areas, farmers are returning to their land to find entire crops wiped out.

From Sydney, Stuart Cohen reports the ripples will likely be felt far beyond Australia's borders.


STUART COHEN: At this busy supermarket in Sydney the price of fresh fruit and vegetables hasn't gone up just yet. But like the slow moving floodwaters in Queensland, to the north, shoppers know it's coming. All they can do is wait.

Customer 1: There's not a lot you can do, especially with fresh goods. And that's what I buy mostly of. So fruit, vegetables and meat, they go up then I pay more.

Flood waters have left fruit orchards caked with dirt and mud. So, prices on melons, mangos and bananas are expected to quadruple -- and possibly stay that way for months. Wheat and other grains could also spike. John Cummings is head of the National Retail Grocers Association.

JOHN CUMMINGS: That's a huge effect on a whole pile of different products. Pumpkin has doubled in price in the last five days. Some fruits we won't see this summer. They're finished.

Queensland is a major exporter of wheat, sugar and coal. That could affect everything from the price of candy to the price of steel in the U.S. Wheat prices are reportedly already up as a result.

In Sydney, I'm Stuart Cohen for Marketplace.

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