Central America sugar, coffee roads hit by Matthew

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]

COFFEE TREES SAFE, ROADS NOT

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

Sunday.

“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.

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