Yasi may have destroyed 15% of Australia sugar crop: group

By Bruce Hextall, Reuters

SYDNEY — Cyclone Yasi may have destroyed half the sugar cane crop in Australia’s key cane growing districts in Queensland, representing about 15 percent 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 percent of the productive potential of the region,” said Steve Greenwood, chief executive of Queensland’s Canegrowers organization.

He was referring to the Innisfail, Tully and Ingham areas were about 30 percent Australia’s sugarcane is grown.

Australia usually cuts more than 33 million tonnes of cane, meaning production could be down around 5 million tonnes from a normal year.

U.S. sugar futures surged 4 percent on Wednesday to three decade highs as Category-Five Cyclone Yasi hit the north coast of the state of Queensland, where more than 90 percent of the country’s sugarcane in grown.

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. Still, cane growers are facing their second bad year in a row as torrential rain, attributed to a La Nina weather event, delayed harvesting with the wet weather promoting cane growth at the expense of sugar content.

In 2010, Australia harvested 27.4 million tonnes of cane, with around 5 million tonnes being left uncut as it was too wet to get harvesting equipment into fields. It was the worst harvest in 20 years. 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 honor 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 AU$500 million (US$504 million) for that industry alone,” said Greenwood in a statement.

“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,” he said.

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

Sugarcane is like grass and once cut grows again. In Queensland the crop is grown on a four year rotation basis.

“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 sugarcane fields resulting from the cyclone. Other crops including bananas have also been hit hard by Cyclone Yasi.

The Australian Banana Growers’ Council said 95 percent of the crop had been damaged in the key Innisfail and Tully banana growing region. Overall, 75 percent of the Australian banana industry has been affected by Cyclone Yasi.