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Australia cyclone ruins about 15pc sugar crop

Sydney, February 3, 2011

Cyclone Yasi may have destroyed half the sugar cane crop in Australia's key sugar cane growing districts in Queensland, representing about 15 per cent of the country's crop, a key industry body said on Thursday.

"While it is too early to assess the full damage bill, initial indications show that damage could be in the order of 50 per cent of the productive potential of the region," said Steve Greenwood, chief executive of Queensland's Canegrowers organisation. He was referring to the Innisfail, Tully and Ingham areas were about 30 per cent Australia's sugar cane is grown.

US sugar futures surged 4 per cent on Wednesday to three decade highs as Category-Five Cyclone Yasi hit the north coast of the state of Queensland, where more than 90 per cent of the country's sugar cane in grown.

The cyclone damage follows Australia last year harvesting its worst crop in 20 years as prolonged rain, attributed to a La Nina weather event, delayed harvesting and lowered sugar content.

Sugar industry officials note the current crop began in October to December last year. Some Asian traders said that with the crushing set for June - there is a good chance for recovery for cane only damaged, not destroyed.

In 2010, Australia harvested 27.4 million tonnes of cane, well short the 33 million plus tonnes usually produced, with around 5 million tonnes being left uncut as it was too wet to get harvesting equipment into fields.

Australia's leading sugar shipper, Queensland Sugar Ltd,  cut its estimate of exports by a quarter to 2.4 million tonnes of raw sugar produced from last year's crush, saying it might have to buy sugar from other producers such as Brazil to honour customer contracts.

It may face a similar situation following the next harvest.

Australia is the world's third-largest raw sugar exporter, selling to countries such as Japan and Indonesia.

"Crops have been devastated in Yasi's wake, the hardest hit being sugarcane - with initial loss estimates at around A$500 million ($504 million) for that industry alone," said Greenwood in a statement.

The worst hit areas were around the towns of Tully, Innisfail and Ingham.

"We've had reports from sugarcane farmers in Tully and surrounds of sugarcane crops which have snapped in half and whole farms that have been completely flattened," said Greenwood.

The losses will translate over many years as sugarcane is a multiple year crop, he said, adding some growers have lost 100 per cent of their crop.

"The full impact will not become clear until growers have had the opportunity to venture back into devastated fields, and possibly until the commencement of harvesting in late June," said Greenwood.

He said once harvesting started the impact of lower productivity resulting from damage could be accurately assessed.

Harvesting will be made more difficult because of debris in sugar cane fields resulting from the cyclone.

Bananas and livestock

Other crops including bananas have also been hit hard by Cyclone Yasi. The Australian Banana Growers' Council said 100 per cent of the crop had been destroyed in Innisfail and Tully, representing about 85 per cent of Australia's A$400 million banana industry's production.

In 2006, Cyclone Larry, the last severe cyclone to hit the Queensland coast, caused a spike in banana prices, helping to lift the country's overall inflation rate.

"We still trying to get a better indication but obviously a lot of the banana crop has been knocked to the ground and sugar cane has also been knocked down," Jock Laurie, president of Australia's peak farmers organisation, National Farmers Federation told Reuters.

"There's been a lot of damage around Tully and also a wider area but not necessarily as much," said Laurie.

"I would think within 48 hours we will know what damage has been done to infrastructure but in the case of crops it could take longer than that," he said.

He said there was also likely to be livestock losses although cattle farmers had moved to stock to safer areas to avoid losses.

Australia is the world's second-largest beef exporter after Brazil with 12.3 million head of cattle in Queensland or 44 per cent of the national herd. – Reuters




Tags: cyclone | Australia | Sydney | Queensland | Sugar crop |

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