Tropical depression Matthew weakens, dumps heavy rain

(Reuters) – Tropical Depression Matthew weakened sharply over Central America on Sunday and spared Guatemala from major damage, but heavy rain still threatened waterlogged sugar and coffee farms.

Guatemalans in the eastern jungle region waded through flooded streets carrying children and belongings on their shoulders and rescue workers worked to open roads blocked by small mudslides, but the storm\’s impact appeared to be light.

\”Up to now there have been no reports of deaths or wounded,\” said Alejandro Maldonado, a senior official at Guatemala\’s emergency services, who added that some 500 people had been evacuated from eastern towns.

Rescue workers in Guatemala and the southern Mexican state of Tabasco remained on alert as river levels rose.

Honduran authorities evacuated some 3,660 people from the area around the country\’s main manufacturing city, San Pedro Sula, which was hit by Matthew as it powered along Honduras\’ Caribbean coast on Friday.

Honduran factories exporting to the United States avoided flooding, but grain and banana crops were damaged as rivers burst their banks. There were few immediate details of the extent of the damage.

\”The floods are stretching across Sula, reaching towns and grain and banana plantations,\” government emergency services spokeswoman Corina Mejia said.

The storm\’s maximum sustained winds decreased to near 25 mph on Sunday, the U.S. National Hurricane Center said. But it warned of continued heavy rains.

Matthew could dump up to 20 inches of rain in some areas of southern Mexico and eastern Guatemala. Mexico\’s oil ports were open and operating normally on Sunday.

EVALUATING IMPACT

Coffee and sugar farmers face rain on fields soaked from this year\’s active hurricane season. Growers worry that rain from Matthew could delay the start of coffee and sugar harvests, but expect to have a sense of the impact on Monday.

\”We are still evaluating the situation,\” said Mario Yarzebski, head of international commercial business at Guatemala\’s sugar producers association.

Sugar losses might be serious because cane fields are still flooded from earlier rains. Coffee trees also risk disease and fungus from too much moisture.

Central America produced 4.43 million metric tons of sugar in the 2009/10 harvest and was hoping for a larger crop this year.

Guatemala, Central America\’s biggest sugar producer, forecast this month that its 2010/11 harvest would be 5 percent lower than the 2.34 million metric tons produced in 2009/10.

Matthew reached Nicaragua\’s coast on Friday, moved along the Honduran Caribbean and hit Belize and Guatemala.

More than 260 people have died in Guatemala so far this year in mudslides and flash floods. In 1998, Hurricane Mitch tore through Central America, killing more than 11,000 people. It was the second most deadly storm on record.

(Additional reporting by Gustavo Palencia in Tegucigalpa; Writing by Robin Emmott; Editing by Paul Simao)