Voluntary Report - public distribution

**Date:** 3/21/2006

**GAIN Report Number:** AS6016

AS6016

**Australia**

**Sugar**

**Cyclone Larry Affects Sugar Production**

**2006**

**Approved by:**

![](media/image1.wmf)Kathleen Wainio, Agricultural Counselor

U.S. Embassy

**Prepared by:**

Mike Darby, Agricultural Specialist

**Report Highlights:**

The far North Queensland region of Australia has been hit by a category
five cyclone. The extreme weather conditions are believed to have
affected all crops grown in the direct vicinity. Australian raw sugar
production could fall as much as 250 TMT as both crops and
infrastructure have been damaged.

Includes PSD Changes: No

Includes Trade Matrix: No

Unscheduled Report

Canberra \[AS1\]

\[AS\]

# SECTION ONE: SITUATION AND OUTLOOK

The far North Queensland region of Australia was recently damaged by a
force five cyclone. Cyclone "Larry", equivalent in force to Hurricane
"Katrina", hit the town of Innisfail at about 6.30 AM on Monday March
20, 2006. The effects of this weather event have been widely reported by
the national media, although reports on damage vary widely.

North Queensland produces sugar and tropical horticultural crops such as
bananas.

Australian sugar production for 2006/07 was recently forecast by ABARE
at 5,203 MMT, an average sized crop compared to historical data. The
area affected by the cyclone (northern region) has historically
accounted for up to 1,000 TMT of refined sugar, although industry
sources suggest that for the 2006 season the region was expected to
produce just less than 750 TMT, or about 14 percent of the national
crop. Post anticipates total production losses in the order of 150 TMT
to 250 TMT, although this figure may change as new information becomes
available.

The northern region contains seven sugar mills and two ports. According
to industry sources, the Babinda and Mulgrave mills have suffered
significant damage while the Mourilyan mill has suffered extensive
damage. Both the Babinda and Mourilyan mills are owned by the Bundaberg
Sugar group, which also owns the South Johnston mill, which is closely
located and relatively unharmed. Two other mills have reportedly
suffered damage. There have been no reports of damage to ports or sugar
loading facilities.

The Herbert/Burdekin region, which produces around 40 percent of
Australian sugar, lies just to the south of the northern region is
understood to have not suffered any damage from the cyclone but has
received valuable rainfall in some areas. Post anticipates a mild
production increase in these areas.

Another tropical cyclone is currently threatening the North Queensland
coast. Tropical cyclone Wati is currently rated at a force two cyclone
but is expected to increase to a force three cyclone. Post continues to
monitor the weather situation in north Queensland.

With regard to banana production, press reports indicate more than
200,000 MT of bananas, valued at \$A300 million, have been destroyed, as
estimates as high as 90 percent crop losses have been reported. A
spokesperson for Biosecurity Australia said Australia will not be
relaxing quarantine measures to allow importation of bananas, following
reports that Cyclone Larry has destroyed most of the national crop.