Australia's east coast drought to intensify as dry weather persists

By Colin Packham

SYDNEY (Reuters) - Australia's east coast will experience dry weather for at least the next three months, the country's meteorological bureau said on Thursday, intensifying a drought that has wilted crops and left farmers struggling to stay in business.

Australia's Bureau of Meteorology said in its latest outlook that there was only a 30 percent chance rainfall would exceed average levels over much of the country's east coast during spring, which runs from September to November.

If the drought gets worse, Australia's agricultural sector will suffer further crop losses, while farmers will also be forced to slaughter livestock in greater numbers as they struggle to find enough food or water to keep them alive.

The bureau also raised the prospect of dry weather in the country's west, which has so far escaped drought conditions, raising new concerns for Australian food manufacturers.

Unable to source enough grain from the east coast, some food producers have started to import supplies from Western Australia, where recent favorable weather had encouraged farmers to sell leftover supplies.

But the bureau said the west coast - the country's largest agricultural producing region - will also experience drier than average weather over the next three months, tightening national supply yet further.

"East coast farmers have largely written off wheat crops this year, but the issue could be the situation in the west," said Phin Ziebell, agribusiness economist, National Australia Bank.

"Some had been calling for a crop in excess of 10 million tonnes (in Western Australia), but if the forecast materialises, the figure will be under threat."

Production of wheat from the world's fourth-largest exporter is already expected to hit a decade low this year.

(Reporting by Colin Packham; editing by Joseph Radford and Richard Pullin)