By Sarah Grainger
GUATEMALA CITY (Reuters) - Tropical Storm Matthew weakened to a depression as it hit Belize on Saturday but is still expected to dump rain on Guatemala, potentially damaging sugar and coffee crops.
Guatemalan authorities urged people in mountainous areas to head for shelters as Matthew looked set to send rains across the country, including regions prone to mudslides.
The storm lost force as it came in from the Gulf of Honduras, and its maximum sustained winds decreased to near 35 mph Saturday afternoon.
Coffee and sugar farmers braced for rain on already waterlogged fields from this year's active hurricane season that has already battered the region. Growers worry rain from Matthew could delay the start of coffee and sugar harvests.
"A lot of ground is already saturated and it could result in landslides," Guatemala's emergency services agency CONRED said in a statement. "We expect that in some places there could be flooding and rivers overflowing," said Eddy Morales, director of the country's meteorological institute.
High winds and heavy rain soaked Honduran tourist resorts along the Caribbean coast and hundreds of people spent the night in Honduran government-run shelters but were relieved the fast-moving storm left towns unscathed.
"The storm looked really dangerous and the rains were heavy, but in the end it passed without doing much," said Juan Angel Delgado, a retired resident of the tourist town of Tela.
Matthew hit Nicaragua's Atlantic coast on Friday afternoon, powered along the Honduran coast and was set to hit Belize and Guatemala on Saturday afternoon.
Sugar losses might be serious because cane fields are still flooded from earlier rains. Cane fields have been flooded and coffee trees 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.
Matthew's rains, if they last for days, could start affecting coffee in Guatemala, exporters and producers said.
UNLIKELY TO REACH GULF
More than 260 people have died in Guatemala so far this year in mudslides and flash floods. The Miami-based hurricane center warned that heavy rain could continue over Central America even after Matthew dissipates.
In 1998, Hurricane Mitch tore through Central America, killing more than 11,000 people in devastating floods. It was the second most deadly storm on record.
Seven people died in floods in a slum on the outskirts of the Venezuelan capital Caracas on Friday after Matthew's westward passage brought heavy rain to coastal regions of Venezuela and Colombia in the past few days.
Matthew is seen dying out over the Mexican state of Chiapas and looked less likely to reach oil-producing areas of the southern Gulf of Mexico.
On the other side of the Atlantic, Hurricane Lisa, the seventh of the season, weakened to a tropical storm on Saturday, northwest of the Cape Verde Islands and posed no immediate threat to land or oil assets.
(Additional reporting by Gustavo Palencia in Tegucigalpa, Alberto Fajardo in Tela, Frank Jack Daniel in Caracas and Tom Brown in Miami; Writing by Robin Emmott, Editing by Paul Simao)
