The floods in Queensland will lead to grocery prices rising as they follow wet weather elsewhere in Australia in recent weeks, the head of the country’s retail association has told just-food.
Ken Hendrick, the chief executive of the National Association of Retail Grocers of Australia, said the state of Victoria had endured heavy rain in December, hitting crops there. Wheat, canola, barley and fruit and vegetable crops had been affected in Victoria, he explained.
Hendrick also predicted that the floods in Queensland could lead to flooding further south in the state of New South Wales, putting more pressure on supplies.
“While there is still serious flooding in parts of Queensland, the waters are now moving south from the top end of the Murray-Darling Basin into New South Wales, where there could be further flooding. The Murray-Darling Basin produces about 40% of Australia’s domestic food supply,” Hendrick said today (7 January).
“All in all, we would certainly expect price rises to result from all of these events up and down the east coast mainland states.”
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The NARGA chief, however, said the impact on prices was still unclear and estimated that it could be “a couple of weeks” before consumers saw price increases in retail stores. Hendrick said some foodstuffs would not be affected, pointing, for instance to bananas, which are mainly produced further north in Queensland and away from the areas affected by the floods, the worst seen for 20 years.
However, Hendrick said he expected prices for “grain-based products” to rise. He said: “Queensland industry group AgForce, which represents mainly grain growers, has estimated that crop losses might be worth A$1bn, or around 0.07% of GDP.”
He added: “There may also have been some stock losses and the floods have probably prevented dairy cows from being milked and/or milk from being transported to dairies. Again, the impact on prices for meat and milk products is not yet evident. There have been reports of serious damage to fruit and vegetable crops.”
While there are fears that the average Australian consumer could face a more expensive shopping bill, Hendrick said other states could plug the lost production in Queensland.
“Of course, if prices for domestic produce and products rise significantly, it doesn’t mean people will spend more on their weekly grocery bill: they may buy imports or go without or perhaps other regions of Australia may be able to meet some of the demand,” he said.