Thursday September 13, 05:35 PM
The price of basic foods is set to rise because Australia's major crop-growing regions remain gripped by drought.
The warning of price rises came as the US Department of Agriculture downgraded its prediction of the Australian wheat crop harvest, which, coupled with poor weather in Canada, Europe and Argentina, will hurt the global wheat supply.
NSW Primary Industries Minister Ian Macdonald said the nature of the drought, which is harshest through NSW's all-important central west grain belt, put the state at "crisis point".
"We believe that if we don't get rain within the next week to two weeks we will have substantial crop failure in NSW," he told reporters in Sydney.
"A crop failure of this magnitude would have a huge impact on the prices of basic foodstuffs right across the state and rolling into Christmas."
The US Department of Agriculture (USDA) has downgraded its forecasts for the Australian wheat crop due to be harvested in most regions by Christmas.
The USDA cut its estimate of Australia's wheat crop to 21 million tonnes, well below last month's estimate of 23 million tonnes.
Poor weather in Canada, Europe and Argentina also has hurt the global supply of wheat.
The prediction pushed the price of wheat to another all-time high on the Chicago Board of Trade, exceeding $US9.00 a bushel for the first time.
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