Coal is Queensland's most important export. Australia accounts for the bulk of the world's coal supplies, with the region making up most of the country's production capacity.
The state, Australia's second-largest by area, had a coal production capacity of more than 185 million tons in 2009. In all, Queensland provides more than half of Australia's coal production capacity of roughly 336 million tons. Its ports – it is the world's largest producer of seaborne steel-making or coking coal – have an annual export capacity of some 225 million tons.
The heavy rains have hit the industry badly. At numerous mines companies have been forced to declare force majeure, particularly around the rich Bowen Basin. The legal clause is typically invoked when miners are unable to meet contractual commitments owing to circumstances beyond their control.
In a sign of the severity and thefar-reaching impact of the floods, more than 90 million tons of Queensland's capacity is currently under force majeure.
The state also produces thermal coal, which is used to power electricity plants, and the floods have resulted in the temporary closure of operations affecting some 8 per cent of the world's thermal coal exports, according to figures from ANZ Bank.
The list of companies that have invoked the clause reads like a who's who of the mining world. Rio Tinto, Anglo American, BHP Billiton and Xstrata have all been forced down this route. Transport firms have also had to scale back their operations temporarily, as have the region's main ports, including the RG Tanna coal export terminal run by the Gladstone Ports Corporation.
Given the size of Queensland's coal reserves, there have been worries about rising prices. Spot coking coal prices are already higher in the aftermath of the floods, rising to about $250 a ton over the past month, some 10 per cent ahead of the industry's prevailing benchmark price of $225 a ton.
In terms of supply, Asian steel makers are believed to have enough coking coal stocked up for now, but there are worries that a prolonged disruption in Australia could drive prices to levels of up to $300 a ton.
Thermal coal prices are expected to trade higher in tandem, with the UBS commodities analyst Tom Price pointing out that "you can't have a lift in metallurgical coal prices without dragging up thermal coal".
Wheat: Prices climb on supply worries
Australia is the world's fourth largest exporter of wheat. Prices had been rising even before the floods, and have almost doubled since June. Against this backdrop, the disruption down under drove benchmark US wheat futures to their highest level in more than two years earlier this week.
GrainCorp, a leading grain handlers, recently warned that the rains could hit supplies for weeks. "We are unable to move anything by rail or, of course, road," the company's corporate affairs manager, David Ginns, said on Monday, noting that Queensland was likely to account for about one million tonnes, or about 5 per cent, of Australia's total output this year.
There are fears, though, that a large chunk of the country's current wheat harvest could end up being reduced to animal feed or low-grade milling grain.
Sugar: Export forecasts dampened by rains
Besides coal and wheat, Australia is also among the world's leading sugar exporters, alongside Brazil and Thailand. As with coal and wheat, the rains have lifted prices, with sugar rallying to 30-year highs. The benchmark raw sugar futures recently touched a peak of 34.77 United States cents per pound.
Australia has had to cut its forecasts for this year's sugar exports by 25 per cent, while the farmers group Canegrowers estimates that some 18 per cent of last year's crop has not been harvested owing to water damage. The impact is such that, in mid-December, the country's biggest sugar exporter, Queensland Sugar, said it was planning to buy more raw sugar from other countries.
"Our average exports are around three million tonnes a year, but this year is going to be down to 2.2 million... and there will be additional volumes from our countries," it said.