Australia canegrowers see lower sugar crop

SYDNEY,(Reuters) - Australia's 2008/09 sugarcane harvest was likely to be less than 30 million tonnes of cane, down from an earlier forecast of over 30 million tonnes, industry group Canegrowers said on Friday. The group said the harvest in the northeastern state of Queensland would continue until after Christmas for the second successive year because of wet weather delays and crushing mill breakdowns.

Last year 35.01 million tonnes of cane was harvested, yielding 4.76 million tonnes of raw sugar, according to the Australian Bureau of Agricultural and Resource Economics.

Australia's sugar crop peaked at 40 million tonnes a decade ago, but has been shrinking as sugar-growing land has been turned over to more profitable crops and forestry schemes which offer tax incentives.

Canegrowers said CSR Ltd's (CSR.AX: Quote, Profile, Research, Stock Buzz) Burdekin mills in the state's north would continue to operate at least a month beyond the optimum processing timeframe.

The harvesting season's extension in the industry's largest producing region would translate into another crop reduction in 2009 as the growing period would be limited by this season's late harvest, said CaneGrowers Chief Executive Ian Ballantyne.

He said stronger prices on offer for 2009 and 2010 might halt falling production and usher in a period of greater stability after a decade of decline.

Adverse weather, regulatory barriers, problems with smut disease and industry rationalisation had contributed to falling production, Ballantyne said.