September 27, 2010 / 8:07 PM / 9 years ago

WRAPUP 1-Central America sugar, coffee roads hit by storm

 * Tropical Storm Matthew kills at least 6 people
 * Honduras cuts sugar crop forecast after Matthew
 * Coffee crop losses not expected to be significant
 * Damaged roads may hurt coffee bean collection
 (Rewrites throughout to wrap in information from Nicaragua,
Guatemala, El Salvador)
 By Gustavo Palencia
 TEGUCIGALPA, Sept 27 (Reuters) - Central America was
struggling to recover on Monday from this weekend's Tropical
Storm Matthew, the latest storm to hit the region, leaving
sugar crops flooded and roads key to coffee areas ruined.
 Matthew drenched Central America on Saturday killing at
least six people and forcing hundreds to evacuate.
 It was the 13th named storm in the Atlantic hurricane
season, which included Hurricane Karl that raked across the
sugar- and coffee-growing state of Veracruz, Mexico earlier
this month.
 Some cane fields in Central America were already flooded
when Matthew hit. Additional heavy rains forced Honduras to cut
its estimate for sugar output in the 2010/11 season for the
second time this year.
 At the start of September, Honduras slashed its forecast to
417,500 tonnes of sugar from the 440,000 tonnes expected
earlier in the year.
 On Monday, Honduras' national sugar producers association
told Reuters they had reduced the outlook once again by 2
percent to 408,700 tonnes of sugar production in 2010/11.
 El Salvador and Nicaragua said their sugar crops were not
affected but Guatemala, the region's biggest exporter, said it
was still evaluating the scope of damages.
 Central America produced 4.43 million tonnes of sugar in
the 2009/10 cycle and had been hoping for a larger crop this
year as northern neighbor Mexico needs more imports after two
disappointing harvests. [ID:nN22248435]
 Latest news on hurricanes:
 Graphic on Central America, Mexico coffee exports:
 Interview on Mexican sugar crop damage:  [ID:nN21168507]
 Analysis on Centam coffee:               [ID:nN0361614]
The coffee crop in Honduras and Guatemala, Central America's
two biggest producers, escaped serious damage from Matthew
although damaged roads could slow the start of the harvest set
to begin next month.
"We're in the same situation (as before Matthew). There are
fungus diseases because of the dampness. That's a problem, but
it's minimal. It won't even affect 2 percent," Ricardo
Villanueva, head of Guatemala's coffee association said.
 "We expect the weather to continue like this until about
Oct. 20," he said. Too much moisture can hurt coffee trees if
they develop disease or fungus.
  Since the coffee losses in Central America were not
expected to be significant in volume, coffee dealers said the
storm did not impact arabica coffee futures trading on ICE
Futures U.S. on Monday.
 Coffee prices <0#KC:> soared to a 13-year high earlier this
month, underpinned by fund buying and tight global supplies of
washed arabica beans ahead of Colombia and Central America's
upcoming growing seasons.
 "Prices are likely to remain well supported as incessant
rains in Central America have damaged roads in Honduras and
Guatemala," Macquarie Commodities Research said in a report.
 The coffee cherry picking season begins in October and if
infrastructure damage is not fixed soon, growers will have
trouble transporting workers to fields and moving their coffee
for export, farmers and exporters say.
 "We have a disaster in the road system in the
coffee-growing areas," Asterio Reyes, the head of the Honduran
coffee association told Reuters in an interview late on
 "If the roads to farms are not repaired in the next 15 to
20 days we will not be able to transport (beans) to collection
stations. The losses will be enormous if immediate action is
not taken," Reyes said, adding the sector was in talks with the
president to resolve the situation.
 "If we don't cut the coffee in time, it can ferment... and
the quality goes down so it can't be exported," he said.
Honduras and Guatemala both expect larger harvests in 2010/11
-- Honduras with 3.83 million 60-kg bags of coffee production
and Guatemala with 3.76 million bags.
 (Additional reporting by Ivan Castro in Nicaragua, Sarah
Grainger in Guatemala, Nelson Renteria in San Salvador and
Marcy Nicholson in New York; Writing by Mica Rosenberg; Editing
by Lisa Shumaker)

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