June 19, 2017 / 2:01 PM / a year ago

Australia cuts sugar harvest outlook after Cyclone Debbie destroys crops

CANBERRA, June 20 (Reuters) - Australia on Tuesday trimmed its forecast for sugar production during the 2017/18 season by 7 percent after a destructive cyclone destroyed crops in a major producing region.

Sugar production in the world’s third-biggest raw sweetener exporter will total 4.8 million tonnes in the 2017/18 season, the Australian Bureau of Agriculture, Resource Economics and Rural Sciences (ABARES) said, down from its previous estimate of 5.16 million tonnes in March.

ABARES said Cyclone Debbie - a powerful cyclone that brought destructive winds and heavy rainfall across Australia’s north east coast in March - was responsible for the production decline.

Lower Australian raw sugar production will aid global benchmark prices, which hit a 16-month low last week on ample global supplies.

Although Cyclone Debbie was unfavourable for Australian sugar production, the heavy rains across Australia’s east coast will aid the country’s dairy sector, ABARES said.

Milk production during the 2017/18 season may reach 9.25 billion litres, up nearly 3 percent from the 8.9 billion litres forecast in March.

The larger Australian milk production is a welcomed boost for Murray Goulburn, country’s largest dairy processor, which has been hamstrung by lower supplies.

Cyclone Debbie also aided Australian beef exports, ABARES said, as heavy rains across the country’s largest cattle producing regions stimulated pasture growth.

Beef exports from the world’s No. 4 exporter during 2017/18 may climb to 1.035 million tonnes, ABARES said, up 3.5 percent from its March forecast of 1 million tonnes.

ABARES said the increased supply of pasture will produce, on average, heavier cattle that will increase the amount of beef produced.

Reporting by Colin Packham; Editing by Christian Schmollinger

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