* Tame hurricane season would be good for risk market

* Capital market chaos has hurt risk writers

* Hedge funds no longer able to supply capital

By Jim Loney

MIAMI BEACH, Fla., June 2 (Reuters) - A milder Atlantic hurricane season would be a stroke of good fortune for the weather risk market because the global economic downturn has weakened its capacity to hedge risk, experts told a risk management conference on Tuesday.

Hurricane forecasters have said the six-month Atlantic hurricane season that began on Monday could be significantly slower than last year's, which produced 16 tropical storms and eight hurricanes, including destructive storms Ike and Gustav.

As a result, fewer wind risk contracts may be written in the weeks leading up to the busiest part of the hurricane season from August onward .

This year is a far cry from 2004 and 2005 in risk markets, when hurricanes battered the U.S. Gulf Coast but reinsurers were strong and hedge funds poured capital back into the system, delegates to the annual Weather Risk Management Association (WRMA) conference in Miami Beach were told.

Chaos in capital markets caused by the global financial crisis has shaken the capacity of the weather market, which WRMA valued last year at $32 billion.