Katrina Felt Around the World

From ABC
News Australia

Hurricane impacts on US grains, cotton
markets

 Hurricane Katrina is wreaking havoc on the US grains market, with
heavy selling overnight contributing to fears the export wheat crop could be
held up by storm damage.

New Orleans and the Gulf Coast are among the largest export and grain
handling areas in the United States, shipping grain from Illinois in the
country’s north through to the Mississippi Delta in the south.

Grains trader Lloyd George says damage to facilities, a lack of employees
to help clean up the debris and silt in the Mississippi River are all
contributing to difficult conditions.

“Funds have basically seen this as a very bearish issue and they were
heavy sellers on all markets last night and that has taken wheat and
soybeans down pretty sharply,” he said.

“The US is the place that largely sets a large degree of grain prices
throughout the world and so any instability of grain prices in the US will
be felt fairly quickly into Australia.”

Meanwhile, the United States’ third largest cotton growing belt has also
been badly damaged by the hurricane.

The damage in Mississippi has prompted cotton cash prices in Australia to
jump by more than $20 a bale over the past three days.

Market commentator Hibbie Barrier from Tennessee says Katrina has already
cut yields.

“The area just north of Jackson and south of Greenwood which got the five
to seven inches and the big wind they were looking at cotton that was
leaning over at a 45 degree slant,” the commentator said.

“They’re more worried because they have dense canopy right now of boll
rot on the bottom crop. Those guys whose cotton which had actually begun to
open near Clarksdale, about 40 per cent of that crop was already open, that
cotton was actually blown out of the burr and they had cotton in the rows.”

So much attention has been given to the rising oil prices that we fail to
think about other commodities that have been affected. Oil is just the start,
within a week you can be certain to see the price of almost every item in the
store go up. Even if the commodity does not come from or through the Gulf Coast
region, it still has to be delivered to that store and whatever means delivers
it relies upon oil. This impact of Katrina is being felt around the globe.