World crops shock looms

But economists warn that Australian consumers are at risk of an uptick in food prices as suppliers pass on higher costs of production amid competition from overseas for quality produce.

In the past six weeks, world corn and soybean prices have surged more than 50 per cent as the worst US drought in 56 years cripples production.

Extremely hot weather in the US farmbelt a region that accounts for a third of global corn production has become so bad that analysts expect the price of corn on world markets to stay near record levels for the next year.

Australian producers exporting their goods will be able to charge overseas customers more, putting pressure on the volume and prices of goods sold into the local supply chain.

Early wheat harvests in southern Russia and Ukraine report declines of up to 40 per cent from last year, following damaging winter weather in the Black Sea region.

The supply shocks to the US and Black Sea regions alone mean global corn and wheat stocks are expected to fall by at least 15 per cent this year.

This week, the Chicago Board of Trade said corn prices were up 53 per cent since June, wheat prices climbed 41 per cent, while soybeans were 27 per cent higher.

"The US corn crop is a category killer," said senior ANZ agricultural economist Paul Deane. "It is such a massive crop that, depending on what yields do, it can set the tone for the grain market for the next 12 months.

"We've pretty much got an assured bull market in grains again for another 12 months. These prices are certainly here to stay. They're not going to disappear very quickly."

Sugar prices also soared in recent weeks after continual wet weather in Brazil, which supplies more than 50 per cent of world sugar exports.