Australian Storm signals Sugar Shortage as Crops Ruined
Monday 7th February 2011
Following Tropical Cyclone Yasi ripping through Australia’s northern Queensland, a region which grows a third of the country’s sugar cane, the storm could potentially cut output in the area by about 50 percent and drive up prices to 30-year highs., according to the producers group Canegrowers.
The storm, which the Australian government says may have wiped out at least A$500 million (£340 million) of agricultural production, raised speculation that the world’s third-largest sugar exporter may struggle to match last year’s output that was the lowest in two decades.
Australian sugar output may be 3.5 million metric tons from the June to December harvest this year, compared with 3.6 million tons from the previous crop, and down from expectations of 4.2 million to 4.3 million tons, according to Rabobank, the International financial services provider operating on the basis of cooperative principles.
Flooding and heavy rain before the Yasi cyclone reduced estimates by about 500,000 tons and the cyclone probably cut the outlook by a further 300,000 tons.
Yasi also ripped through a banana-growing region representing about 85 percent of Australian production and analysts have warned the damage would severely affect availability and stoke prices in coming months.
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