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Australia's weather bureau sees increased cyclone risk

Published 10/10/2016, 05:31 pm
Updated 10/10/2016, 05:40 pm
© Reuters.  Australia's weather bureau sees increased cyclone risk
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SYDNEY, Oct 10 (Reuters) - An above-average number of cyclones is likely for Australia's tropical north in coming months, the country's weather bureau said on Monday, potentially hitting exports.

Previous cyclones in Australia have wrought havoc on ports, mines and crops, driving price spikes in commodities from iron ore .IO62-CNI=SI to coal GCLNWCPFBMc1 and sugar SBc1 .

There is a 67 percent likelihood that more than the long-term average of 11 cyclones will form in the Australian region in the summer season between November and April, the Australian Bureau of Meteorology said, with the northwest likely to receive more than five cyclones.

"It can be really uncertain as to how these cyclones impact, but if they hit key areas of production as well as the ports they can have a very significant effect," said Adrian Hart, a senior economist at BIS Shrapnel, who forecasts mining production in Australia.

In 2013 the world's largest iron ore export terminal at Port Hedland, used by BHP Billiton (LON:BLT) BHP.AX and Fortescue Metals Group FMG.AX , was shut when Cyclone Rusty made landfall, halting shipments for three days and stabilising a then-falling iron ore price.

Cyclone Yasi led to the closure of coal terminals in Australia's northeast for almost a week in February 2011, leading to a surge in coal prices. The same storm also destroyed about 15 percent of the nation's sugar cane crop, pushing world prices to their highest in three decades.

Warmer-than-normal oceans to the north and east of Australia increase the likelihood of cyclones forming, Australia's weather bureau said.

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