Tropical depression Matthew weakens, brings floods

GUATEMALA CITY (Reuters) - Tropical depression Matthew sparked floods across Central America on Sunday, killing one man in El Salvador and threatening already waterlogged sugar and coffee farms.

Across Central America, people in coastal and low-lying areas waded through flooded streets carrying children and belongings and rescue workers worked to open roads blocked by small mudslides. One man was swept away by high waves in a coastal town in El Salvador, rescue workers said.

So far there were no reports of damage to crops.

Emergency services in Guatemala and the southern Mexican state of Tabasco were also on alert as river levels rose.

Honduran authorities evacuated some 3,660 people from the area around the country's main manufacturing hub, 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," said Honduran government emergency services spokeswoman Corina Mejia.

The storm's maximum sustained winds decreased to near 25 mph (35 kph) on Sunday, the U.S. National Hurricane Centre said. But it warned of continued heavy rains, while a broad area of low pressure formed in the Caribbean over Nicaragua and Honduras on Sunday, although it had only a small chance of becoming a tropical cyclone soon.

Matthew could dump up to 20 inches (50 cm) 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 already 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 tonnes 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 tonnes 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 and Nelson Renteria in San Salvador; Writing by Robin Emmott; Editing by Todd Eastham)