Mon Dec 6, 2010 11:44am EST
* Inflation to rise on downpours but stay within targets
* Coal, coffee sectors expected to be affected by rains
*Government estimates cost of $1 bln due to bad weather
BOGOTA, Dec 6 (Reuters) - Strong rains flooding agricultural land and washing away roads in Colombia will increase inflation but not so much aschange consumer price targets, officials said on Monday.
Bad weather has affected commodity-producing countries worldwide, from rains stalling the wheat harvest in Australia to dry spells in some ofArgentina's soy-growing areas and oil refinery outages in OPEC member Venezuela.
In Colombia, downpours blamed on the La Nina weather phenomenon have pounded the Andean nation in recent months,damaging infrastructure, water-logging farmland and hitting top foreign exchange earners like coffee and coal.
"It's inevitable that this happens, not to the point where inflation spills over intounmanageable proportions, but yes it's inescapable that food prices are going to go up in these months," Agriculture Minister Juan Camilo Restrepo said.
Finance Minister Juan Carlos Echeverry said onMonday the cost of the rainy season could be near $1 billion -- and the government is expected to declare a state of emergency to be able to spend more money.
The first inflationary impact of the heavyrains -- which the government's weather office expects to last into the first quarter of next year -- was felt in November when consumer prices rose 0.19 percent, double market expectations.
"Up toNovember, food prices had been surprising on the downside and are still only up 2.4 percent year-on-year, but adverse weather conditions and increasing demand from Venezuela are likely to keep foodprices under pressure over the next couple of months," said Alberto Ramos of Goldman Sachs.
Low inflation expectations have allowed Colombia's central bank to keep its key interest rate at historic lows...