canberra, we have a problem

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    Australia's economy is riding high on the mining boom, but severe weather could be an unforeseen drag on growth, as the worst floods in 20 years ravage crops and disrupt mining across the country.
    Authorities have declared natural-disaster zones in more than 100 regions across five states, as flooding over the past three weeks has brought a dramatic end to a decade-long drought in some areas. The territory hardest hit is prime agricultural land in the Murray-Darling basin, which spans parts of Queensland, New South Wales and Victoria
    states, covering an area bigger than Germany.
    Rain damage will result in about half of Australia's estimated 24-million-metric-ton wheat crop being classified as suitable for livestock feed or
    downgraded this year, at a cost of nearly US$1 billion, National Australia Bank Ltd. estimates. Australia is a major global supplier of wheat with domestic consumption of
    only about seven million tons, leaving the remainder typically available for exports.
    The heavy rains also have disrupted the sugar-cane harvest, driving raw sugar output down 20%, according to government estimates. Australia is the third-largest exporter of sugar after Brazil and Thailand.
    The September-to-November period was the wettest ever recorded, and above-average rainfall has continued into December, according to the Bureau of Meteorology. The
    rainfall is associated with the weather pattern in the Pacific Basin known as La Nina that is conversely helping create a drought hitting farmers in parts of New Zealand.
    Weather woes such as the current disturbance in Australia continue to present a risk to global food supply. The past year has been one of extremes for agriculture markets, roiled by droughts, floods and unexpected weather patterns playing havoc with crop
    seasons. The hottest summer in 130 years plunged Russia's grains sector into turmoil and saw the country ban exports for the year in a bid to curb food inflation as prices
    soared. A similar picture was seen in neighboring Ukraine, with the effect of reduced supplies from two of the world's largest grains exporters propelling prices higher
    and hurting trade flows around the world.
    The rains are "certainly going to have an effect on a range of industries," said Julie Toth, a senior industry economist at Australia & New Zealand Banking Group
    Ltd., who said she fears the nation's economic growth could be crimped by the flooding in the December quarter.
    The severe flooding is affecting coal mining in central Queensland. Several miners in the region have called force majeure -- or unavoidable failure to meet an obligation --
    on deliveries because of floods, and the inability of miners to produce coal is depleting stockpiles, according to Greg Smith, general manager, operations, at Dalrymple Bay Coal Terminal, one of the biggest coal ports in the world. "The mine supply problem is the biggest issue," said Mr. Smith, adding that one area in the port's
    hinterland received 210 millimeters, or 8.4 inches, of rainfall in four hours on Sunday.
    "A lot of these mines are open pits, which become open swimming pools."
    The flooding has helped drive up coal prices. Prices are at their highest level since late 2008.

    On a more personal note, I know of a number of heart-rending horror stories.
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