An outbreak of contagious fungal smut disease in Australia's sugarcane crop could cause production losses of up to A$750 million ($555 million) over the next five years, industry bodies Canegrowers said.
Eight properties had been placed in quarantine on Monday, up from two on Friday, as the disease spread through the Bundaberg sugar growing region, about 280 km (175 miles) north of Brisbane.
Cane smut can reduce sugar yields by 30 percent or more by stunting plants and impeding re-growth.
The $750 loss estimate was a "worst-case scenario", Canegrowers general manager Ian Ballantyne said. It was based on small losses in the first year, 15 percent losses in the second year, 30 percent in the third year and then a recovery in the fourth and fifth years.
The disease has only been found around Bundaberg in the central coastal region of Queensland.
But Ballantyne warned the disease was likely to spread along trld sugar trade. Exports mainly go to Asia.
Growers, contractors, scientists and government officials gathered in Bundaberg on Monday to assess the situation after the start of harvesting and crushing cane in the region, due to begin on Monday, was delayed.
Broker ABN Amro said in a report that a 30 percent reduction in cane yields in the year to March 31, 2007 would lead to a 10.6 percent downgrade in forecast net profit for listed sugar miller CSR Ltd.
A spokesman for CSR said its mills in the Burden region around Townsville were about 700 km (435 miles) north of Bundaberg, where the smut outbreak has occurred.
ABN Amro said it was not changing its forecast net profit for CSR of A$283.3 million for fiscal 2007, but would "remain watchful". CSR were trading down 0.3 percent in an overall market down 0.9 percent.