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This is why your grocery bill is set to sky-rocket

Grocery prices are set to rise. Source: Getty

Shoppers are being warned their grocery bill could soar, after the weather bureau issued a bleak spring outlook for the Murray-Darling Basin.

In July, the Bureau of Meteorology recorded ‘lower than average’ rainfall in the Murray-Darling Basin, with streamflow also lower than average, and now BOM’s climate outlook for the next three months indicates a ‘drier than average’ spring for most of Australia.

Dry weather is bad news for farmers, and it means food will become more costly for consumers.

What happened to food prices last time there was a drought?

Australia has already seen a hike in food prices, with the Australian Bureau of Statistics recording price hikes to vegetables, poultry, bread and fruit in the first quarter of the year due to dry conditions.

Vegetable prices rose 7.7 per cent, and fruit rose by 6.5 per cent in the year to March.

“Drought and adverse weather conditions continue to reduce the supply of a selection of fruits and vegetables, and higher input costs are putting upward pressure on prices for other food items such as poultry and bread,” the ABS said then.

And Richard Heath, head of Australian Farm Institute, said earlier this year that consumers generally feel droughts through grocery prices, according to The Daily Telegraph.

What’s happening in the Murray-Darling Basin?

The Murray-Darling Basin isn’t receiving much rainfall due to this year’s severe drought, and to make matters worse, hundreds of billions of litres of water is missing from the Basin.

The government was meant to put funds towards fixing the Basin, but rather than invest the money into infrastructure, ABC’s Four Corners revealed more water had instead been sucked out.

The investigation revealed that over $4 billion in Commonwealth funds had been handed to irrigators, which allowed them to expand their operations and use more of the Basin’s water.

Essentially, after billions of dollars of taxpayer money being injected into saving the Basin, the system could be worse off than before.

Now, scientists are calling for an independent commission of inquiry into the management of water flows in the Basin.

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Yahoo Finance’s All Markets Summit will take place on the 26th September 2019 at the Shangri-La Hotel, Sydney. Source: Supplied