Australia's Queensland state, the world's largest coking coal shipper and the nation's biggest sugar producer, may get more than 100 millimeters (4 inches) of rain in the next few days in its coastal regions.
The rain, which isn't typical at this time of the year, will fall along the central Queensland coast, David Jones, head of climate analysis with the Bureau of Meteorology, said in Melbourne. ``Substantial'' rain is expected on the coast from about Cairns to almost Brisbane, he said.
Heavier-than-usual rain and flooding in central Queensland in January and February forced BHP Billiton Mitsubishi Alliance, the world's largest shipper of steelmaking coal, and Xstrata Plc to miss deliveries, sending coal prices to a record. Queensland produces 94 percent of the nation's sugar output.
``It's normally this time of the year when sugar content is rising,'' Ron Mullins, acting chief executive officer for industry group Canegrowers, said today by phone from Brisbane. ``Wet weather could actually have an impact on sugar content.''
Rain may further delay the sugar cane crushing season in the state, already hampered by winter rainfall and mill outages, Mullins said. Australia is the world's third-largest sugar exporter.
Sugar futures for October delivery fell 0.22 cent, or 1.7 percent, to 12.40 cents a pound on ICE Futures U.S., the former New York Board of Trade, when last traded July 18. The commodity is up 24 percent in the past year.
Record Prices
Annual contract prices for coking coal tripled to a record $300 a ton in the year that began April 1 after the Australian floods cut global supplies.
Queensland coastal towns including Mackay, Rockhampton and Bundaberg are forecast to get ``substantial'' rain this week, the weather bureau's Jones said. Dalrymple Bay Coal Terminal Pty, Australia's second-largest export harbor of the fuel, is 38 kilometers (24 miles) south of Mackay.
``The market will be on watch following the big disruptions earlier in the year,'' Mark Pervan, senior commodity analyst at Australia & New Zealand Banking Group Ltd., said today in Melbourne. ``This will certainly put an upward bias on prices in the near term. With 50 percent of global coking coal supplies sitting in that area of the world, it is pretty vulnerable.''
Still, the rain will need to go further inland to affect coal production, Pervan said.
Disaster Zone
The town of Mackay on the central Queensland coast was declared a disaster zone on Feb. 15 after the heaviest downpour in 90 years dumped more than 600 millimeters of rain in a 24- hour period. That followed the rain in central Queensland that caused flooding at coal mines owned by Xstrata, and BHP Billiton Mitsubishi Alliance.
Rio Tinto Group also warned in February it may miss coal deliveries after heavy rains in Queensland.
``We are monitoring the situation,'' Rio spokeswoman Amanda Buckley said by phone from Melbourne today. BHP is ``not expecting heavy rains to impact on our operations but we will monitor the situation,'' spokeswoman Samantha Evans said by phone from Melbourne.
``There's a major upper level trough moving into Queensland at the moment and we expect a pretty significant low to fall on the coast,'' the bureau's Jones said ``These systems happen occasionally, so they are not unheard of these upper levels troughs, and when you do get them, it really can rain heavily on that Queensland coast.''