[10 Dec] Thai Songkhla, Surat Thani Rubber Output Down on Floods

Natural rubber production in Songhkla and Surat Thani provinces of Thailand for November dropped as much as 70%-80% from normally low levels for the month due to recent floods, a senior industry executive said Wednesday.

"A field survey conducted by our company indicates that the impact was most severe from the last week of October to late November," said Archvis Vorapanya, chief financial officer of JSP Futures, a Bangkok-based commodities brokerage.

Production in most of southern Thailand was affected, including in the provinces of Yala and Nakhon Si Thammarat, he said, noting that final data is still being collated.

Archvis said rampant flooding and the resulting slowdown in production were the main reasons for the spike in prices last month, when they rose above Y250 a kilogram for the first time in more than a year.

"As floods broke, buyers started stocking rubber as a hedge against inflation, expecting that it will become more expensive," he said.

Floods also hindered transportation of latex and USS3 raw material to factories from plantations, Archvis said.

November is traditionally a low production month in Thailand due to monsoon rains, but industry and government officials said the intensity of the rains this year has been higher than normal.

Last year, Thailand produced 183,000 metric tons natural rubber in November, the lowest for any month. It was only month in 2008 when production fell below 200,000 tons.

Production in November this year is expected to be even lower than last year, and as much 70%-80% below normal levels for the month, Archvis said, without giving a figure for normal output in November.

Floods have now receded and supplies have improved, but they could tighten again next month at the start of the traditional wintering season, when leaves fall from rubber trees and yields decline, Archvis said.

Daily arrivals of USS3 raw material in the three central markets of Thailand, which fell below 50 tons last month, were above 200 tons Tuesday and were estimated around 100 tons Wednesday.

Thailand is world's largest natural rubber producer but output this year has been hurt by heavy rains and floods. About 70% of Thai rubber output is from the southern provinces.

Thailand's production is projected by the industry to fall at least 12% to a multi-year low between 2.5 million and 2.7 million tons. Production in the January-September was estimated at 2.15 million tons, down 9% from the same period a year earlier.

(Source: irco.biz)