Australia floods: Food prices 'to rise 30%

BBC News

Food prices in Australia could rise by as much as 30% in the coming months as a result of the Queensland floods, it has been warned.

The investment bank JP Morgan says it expects food prices to spike, which will also push up headline inflation.

The bank's chief economist in Australia said 50% of crops had been affected by the floods, with 20% wiped out.

Stephen Walters also told the BBC that rises in Australia could have a knock-on impact on prices in Asia.

JP Morgan also said that coal mining had been significantly damaged and estimated that the floods would shave 0.4% off GDP growth in the last quarter of 2010 and the first three months of 2011.

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