By Ivan Castro
MANAGUA (Reuters) - Tropical Storm Matthew picked up speed on Friday as it headed for Nicaragua and Honduras, threatening landslides and damage to the region's coming coffee and sugar harvests.
Hundreds of people evacuated the area in Matthew's path, inhabited by largely poor indigenous groups living in wood houses perched on the banks of rivers or along the coast.
The 13th named storm of the Atlantic season is expected to dump six to 10 inches of rain on parts of Central America, a region already battered by months of heavy rains, the U.S. National Hurricane Center said.
"Matthew has increased its forward speed and is now moving toward the west near 20 mph," the center said. Matthew's center was expected over northeastern Nicaragua and eastern Honduras this afternoon.
"We are going to see serious amounts of rain across the country that will cause floods and landslides. Residents living near coastal areas and riverbanks should evacuate," said Honduran meteorologist Francisco Argenal.
Around 375 people from Nicaragua's outlying Miskito Cays were moving to temporary shelters before the storm and Honduras' government put the isolated region near the border on high alert.
More than 260 people have died in Guatemala during this year's hurricane season, starting with Tropical Storm Agatha that battered the country in May, knocking out roads to coffee farms and destroying some sugar cane fields.
A hurricane watch was in effect from Puerto Cabezas, Nicaragua to Limon, Honduras. The watch means hurricane conditions are possible within the next 12 to 24 hours. A tropical storm warning was issued for Honduras' offshore islands, like the popular tourist destination of Roatan, and for the coast of Belize.
Matthew was moving west, but expected to shift north toward Guatemala and Mexico's Yucatan Peninsula and lose force before reaching the Gulf of Mexico, where most of Mexico's oil wells are located. Mexico is still recovering from Hurricane Karl, which hit the Gulf coast last weekend.
COFFEE, SUGAR CROP FEARS
The small economies of Guatemala, Nicaragua and Honduras depend heavily on agricultural exports like coffee and sugar. Global prices for the commodities could be affected by any major losses but coffee market players said Matthew had so far not had an effect since damage was not expected to be too severe.
Nicaragua has already slashed its coffee production estimate for the 2010/2011 season and infrastructure damage in Honduras and Guatemala -- the region's top two coffee producers -- slowed some exports.
"If it carries on raining like it has been raining, we're going to have problems in terms of leaf disease and beans dropping because we're getting closer and closer to harvest time," a Guatemalan coffee exporter said.
Excess humidity can lead to fungus and disease on coffee cherries. So far growers say the Guatemalan coffee crop has been largely spared, but the road damage could delay the start of the harvest in October, the exporter said.
Guatemala and Honduras both cut their sugar harvest forecasts by around 5 percent because of the rains.
"We still have cane fields that are flooded. There will definitely be more losses," Carlos Melara, the head of Honduras' sugar association said.
Central America produced 4.43 million tonnes of sugar in the 2009/10 harvest.
At the other end of the Atlantic, Tropical Storm Lisa was meandering slowly northeastwards, about 320 miles north west of the Cape Verde Islands, but posed no threat to land or oil assets.
(Reporting by Ivan Castro in Managua, Gustavo Palencia in Tegucigalpa, Sarah Grainger in Guatemala City, Mica Rosenberg in Mexico City and Marcy Nicholson in New York; Editing by Kieran Murray and Jerry Norton)
