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Queensland Flood cost $5 Billion in Damages: Wheat and Coal Prices go up

January 5, 2011 Comments off

Queensland is roughly the size of France and Germany, however the catastrophic floods of Australia will be felt worldwide. Queensland premier Anna Bligh said the flooding was unprecedented in the state and had now directly affected 40 towns, raising the number from 22 and affecting 200,000 people. “We are unable to move anything by rail or, of course, road,” David Ginns, corporate affairs manager at GrainCorp told Reuters, adding that transport of grain to port elevators from inland areas had effectively ceased, and the domestic distribution network had also been impacted.  Ten people have died during the disaster.

Australia’s record floods are causing catastrophic damage to infrastructure in the state of Queensland and have forced 75 percent of its coal mines, which fuel Asia’s steel mills, to grind to a halt, Queensland’s premier said on Wednesday.  “Seventy-five percent of our mines are currently not operation because of this flood,” Premier Anna Bligh told local television. “So, that’s a massive impact on the international markets and the international manufacturer of steel.” Queensland state is the world’s biggest exporter of coal used in steel-making and contributes more than 40 percent of the global seaborne trade.  Steelmakers in Asia may be forced to pay as much as 33 percent more for hard coking coal after the flood.  Full-year sales of metallurgical coal has been revised down from 6-6.5 million tonnes to 5.8-6.2 million tonnes.

Queensland’s winter grain crop has been totally destroyed by flooding. It is estimated that it will cost the industry about $400 million.  Australia’s wettest spring on record have damaged the crop quality in the world’s fourth largest wheat exporter, stoking supply concerns and pushing up already high global wheat prices.  It is possible that half of the national crop or about 10 million tonnes could be downgraded to animal feed or low-grade milling grains.

The floods will have a devastating impact on summer crops of sorghum and cotton greatly reducing yield. Prices began to surge last summer after a drought in Russia and the Black Sea region decimated the crop there and shut off exports. In recent months, wet weather in Australia and dryness in U.S. wheat areas have raised fears over supplies.

295,000 Deaths :950 Natural Disasters in 2010

January 5, 2011 Comments off

By: Munich RE

Jan. 3, 2011 – Several major catastrophes in 2010 resulted in substantial losses and an exceptionally high number of fatalities. The overall picture last year was dominated by an accumulation of severe earthquakes to an extent seldom experienced in recent decades. The high number of weather-related natural catastrophes and record temperatures both globally and in different regions of the world provide further indications of advancing climate change.

Altogether, a total of 950 natural catastrophes were recorded last year, nine-tenths of which were weather-related events like storms and floods. This total makes 2010 the year with the second-highest number of natural catastrophes since 1980, markedly exceeding the annual average for the last ten years (785 events per year). The overall losses amounted to around US$ 130bn, of which approximately US$ 37bn was insured. This puts 2010 among the six most loss-intensive years for the insurance industry since 1980. The level of overall losses was slightly above the high average of the past ten years.

“2010 showed the major risks we have to cope with. There were a number of severe earthquakes. The hurricane season was also eventful – it was just fortunate that the tracks of most of the storms remained over the open sea. But things could have turned out very differently”, said Torsten Jeworrek, Munich Re’s Reinsurance CEO. “The severe earthquakes and the hurricane season with so many storms demonstrate once again that there must be no slackening of our efforts to analyze these risks in detail and provide the necessary insurance covers at adequate prices. These prices calculated by the insurance industry make it possible to assess the economic consequences of these otherwise difficult-to-evaluate risks.”

Major catastrophes dominate the list of losses

In all, there were five catastrophes last year assignable to the top category of “great natural catastrophes” based on the definition criteria of the United Nations: the earthquakes in Read more…

2010 in Review-Commodities affected by World Events

January 4, 2011 Comments off

Notable events that affected commodity prices in 2010