UPDATE 2-Strikes delay cane crush at Australia's biggest sugar producer

(Adds comment on global sugar market impact in paragraphs 12-13)

By Peter Hobson

CANBERRA, May 16 (Reuters) - Australia's largest sugar producer, Wilmar Sugar, said on Thursday that strikes by its employees would delay the start of cane processing at its factories by several days but that as yet the industrial action is not expected to affect overall output.

Wilmar Sugar, owned by Singapore-based Wilmar International , has eight sugar mills in Australia's Queensland state that run 24 hours a day during the cane crushing season from June to November.

The company says it crushes about 15 million metric tons of sugarcane each year, producing over two million tons of raw sugar, or more than half of Australia's total.

Australia is a major exporter of sugar, shipping most of its production overseas.

Workers demanding a larger pay increase than Wilmar is willing to offer have already walked out for two 24-hour periods so far this month.

"Despite our best attempts to mitigate the impact of work stoppages and other industrial action, we are unable to complete the preparatory work necessary to meet our scheduled start dates," a spokesperson for Wilmar Sugar said in a statement.

Processing will be delayed by two days at seven of the mills and by seven days at the eighth, the Plane Creek Mill, the spokesperson said.

With another two stoppages planned for Tuesday and Thursday next week, start dates could be pushed back further, the spokesperson said.

Wilmar says it employs about 2,000 people during the crush season and takes cane from around 1,500 farmers. Its mills are vital sources of income for rural communities.

Delay will impact the entire supply chain, said Dan Galligan, head of Australia's CANEGROWERS industry association.

"A day or two is not that dramatic, but a week or more would be," Galligan said.

Industry sources said there would need to be a lengthy delay for the strike to have repercussions for the global market.

"If resolved quickly there shouldn't be much impact at all on the global market," one industry source said.

A spokesperson for the local branch of the Australian Workers' Union said the strikes would continue "until we reach a deal that reflects the worth of our members and the sugar communities near these mills."

"The length and frequency of the strikes is flexible and will reflect the success of the ongoing bargaining with Wilmar," the union spokesperson said. (Reporting by Peter Hobson, Additional reporting by Nigel Hunt; Editing by Christian Schmollinger and Tom Hogue)