Soft, metal commodities avoid major Gustav damage
NEW YORK (Reuters) - As Hurricane Gustav pounded Louisiana, commodities producers from coffee to aluminum and cotton said Monday it was too early to assess damage, but were thankful the storm had weakened before striking land.
A Folgers coffee plant had shut down late Saturday, a London Metal Exchange metal warehouse was on high enough ground to avoid flooding, winds swirling an Alcoa anode plant remained tame, and Louisiana cotton fields were far enough north to avoid major damage.
Much of the Louisiana sugar crop, valued at about $1.76 billion and accounting for about 20 percent of U.S. production, is grown in Southern Louisiana parishes, according to the American Sugar Cane League's website.
Louisiana sugar growers and industry representatives were unreachable, both because many had cleared out to avoid the hurricane and because Monday is the U.S. Labor Day holiday.
But some sugar analysts said they thought the crop had probably not sustained enough damage from Gustav to affect prices. They reminded, however, that it took several days to assess damage from Hurricane Rita three weeks after Hurricane Katrina had flooded New Orleans.
By 3 p.m. EDT, Hurricane Gustav had barged onto the U.S. Gulf Coast just west of New Orleans, hammering the city devastated by Katrina in 2005 with surging floodwaters that threatened its rebuilt levees.
At the Port of New Orleans, spokesman Chris Bonura said water had not fully overtopped the Industrial Canal, meaning water levels held below the levee. But wind and wave action was pushing water over the canal levee.
With most people still undercover from the storm, Bonura and others added that Gustav's impact was difficult to assess and depended on how much water floods the levees.
"They've made some improvements to the flood wall. The problem with Katrina was that the flood overtopped the wall and that caused the whole wall to erode. That doesn't seem to be the case right now," the Port spokesman said.
"It's a situation that everyone is monitoring," he said.
A spokesman for a London Metal Exchange warehouse, which houses base metals like copper and zinc, said his facility was elevated above the canal and "highly unlikely" to see flooding.
He said he would have to wait until the storm subsided before getting he could get back to the warehouse.
"It would have to be one hell of a deal for the water to get up to the warehouse. If any roof damage has occurred that let rain in, I can't say. I'm not saying flooding is impossible, but it seems highly unlikely right now," he said after watching news reports about 50 miles away.
A spokeswoman for the Folger's coffee processing plant, the world's largest, said it had shut down on Saturday night and evacuated all of its employees, but had no word on the plant's condition by 2 p.m.
"Basically, we're riding out the storm," said Jen Becker, spokeswoman for Folgers, a unit of Procter & Gamble Co.
Folgers improved the New Orleans plant after Hurricane Katrina virtually ransacked it 3 years ago, and moved some operations to its Kansas City facility for ramp up during emergencies.
"Regardless of what happens in New Orleans, operations will be able to continue at our plant in Kansas City. Hopefully, consumers will see no stoppage in Folgers, Duncan Donuts and Millstone products on their store shelves," said Becker.
Alcoa spokesman Kevin Lowery said Gustav was too far from its alumina refinery in Point Comfort, Texas, and it was too early to know the condition of its anode plant in Lake Charles, Louisiana.
By around 3 p.m., wind speeds in Lake Charles ran around a tolerable 16 miles an hour, but were forecast to accelerate to 50 mph later on Monday.
Cotton fields in Northern Louisiana were probably too far from the storm for a direct impact, but analysts said they could suffer residual rain damage affecting both fiber quality and quantity if bolls get destroyed by wind or rot.
(Editing by John Picinich)
