CANBERRA, Sept 18 (Reuters) - Australia has detected the larvae of khapra beetles in imported nappies sold in supermarkets nationwide, the agriculture ministry said, raising concerns the pest could infest grain storages and disrupt agricultural exports.

The ministry said in a statement on Tuesday it had been working with the importer and retailer of the nappies to trace and treat nappies containing the insect since it was alerted to their detection in New South Wales on September 7.

Australia is currently free of the khapra beetle, a tiny brown insect up to 3 mm (0.12 inches) long that feeds on stored food, making it unusable.

The agriculture ministry classifies khapra beetles as the biggest pest threat to Australia's A$18 billion ($12 billion) grains industry, saying their establishment in the country would cause trading partners to reject Australian goods, causing huge losses.

Australia is one of the world's biggest exporters of wheat, barley and sorghum.

"This is a pest that would have the same impact as a foot and mouth animal disease outbreak in Australia," said Xavier Martin, president of farm industry group NSW Farmers.

"Governments have to do everything in their power to contain and eradicate this pest, or the damage will be beyond our worst nightmare," he said.

The larvae were found in the brand Little One's Ultra Dry Nappy Pants Walker Size 5, the ministry said, which is only sold by Woolworths (WOW.AX), opens new tab, Australia's largest supermarket chain. Woolworths said it had removed nappies of that brand in that size from shelves and quarantined them.

The company also said the nappies were supplied by Belgian manufacturer Ontex (ONTEX.BR), opens new tab, which did not immediately respond to a request for comment.

The ministry did not say how many larvae were detected in how many nappies. It said anyone who had bought similar nappies should seal them in a bag and call the authorities.

Khapra beetles are native to India but have spread through numerous countries in Asia, Africa and Europe, according to the ministry.

($1 = 1.5049 Australian dollars)

Reporting by Peter Hobson; Editing by Christian Schmollinger

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Beetle that threatens Australia's grains industry found in imported nappies