Flood waters after Cyclone Yasi cut the Bruce Highway near Innisfail, Australia. The nearby banana plantation has been flooded and demolished. Brian Cassey / news.com.au

By Amanda Drury, CNBC News Anchor
Published: Friday, 4 Feb 2011 | 11:27 AM ET El Niño and La Niña have a lot to answer for. And we’re not talking about two naughty kids. Weather pattern El Niño brought Australia a crippling drought for nearly decade. La Niña has taken its place with decidedly strong and wet force. Witness the recent fatal flooding and a cyclone bigger than Hurricane Katrina. And now, people in the state of Queensland are being told they should brace themselves for more—a La Niña forecast to last into the second quarter. Beyond the devastating loss of life and livelihoods, why should we care about the impact of these Australian natural disasters? The answer is simple, and very clear on the rioting streets of Egypt: commodity price inflation. World food prices hit their highest level ever in January, and the UN food agency says they’re set to keep rising for months. Sugar prices hit 30-year highs this week as Cyclone Yasi decimated many of Queensland’s sugarcane fields. Australia is the world’s third-largest sugar exporter. Trade group Canegrowers of Australia says some growers have lost everything—houses, crops and machinery—and that the ensuing supply shortage will drag over many years because sugarcane is a multi-year crop. Bad news for consumers of sugar, especially when prices are already high due to production problems in China and Thailand and falling exports from India. The same goes for banana crops, with initial estimates suggesting Yasi may have wiped out as much 90 percent of the banana crop. In addition, it will take 12 to 18 months before full production can be restored. Five years ago, when Queensland’s banana crop was flattened by Cyclone Larry, banana prices soared as high as $15 a kilogram, against pre-cyclone prices of $2 to $3 a kilo. The same may happen again. Among other commodities affected, copper and tin prices have also reached new highs. And while the Aussie coal industry was largely spared by Yasi, many mines closed as a precaution. …

Australian Storms Push Commodity Prices Higher