"Since July sugar prices have fallen by around 25 per cent and there has been a continuation of the unseasonable wet weather that delayed the start of crushing and has depressed sugar content," CSR said in a statement. Cyclone Larry and unseasonal rain across north Queensland in the last month is expected to reduce Queensland sugar volumes by 10 per cent on last year's 4.6 million-tonne yield. "Given these circumstances it now looks unlikely that CSR will achieve the improved profit outcome previously expected." CSR produces 40 per cent of Australia's sugar from seven mills in North Queensland. The company had forecast a 10 per cent rise in group earnings before interest and tax for the year to March 2007. It did not issue a revised figure in Thursday's statement but said earnings depend on the crushing season up until mid-December and on world sugar prices. Sugar prices at the New York Board of Trade are now at US11.62 a pound, down from a record 25-year high of 19.73 in January after 2.5 million tonnes of sugar supply surplus caused a glut in the global market. Australian sugar producers could also be affected by an outbreak of cane smut, first found in July. It could cripple the industry if it travels to other areas.