This entry was posted on Wednesday, September 14th, 2011 at 4:44 pm and is filed under Rubber News. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.
SINGAPORE (Dow Jones)–Heavy rain in Thailand is raising concerns over possible flooding in the world”s largest natural rubber producer and exporter, particularly as some growing regions in the south Thailand begin to experience rising water levels.
“The situation is still not that serious yet. The problem, however, is that the rain shows no sign of subsiding,” said a Bangkok-based trader at a major exporting firm.
Thai Rubber Association President Pongsak Kerdvongbundit said Monday that prices of USS3 grade–raw material used to make processed rubber–could rise to THB150 a kilogram by the fourth quarter of the year from THB130/kg now, due to persistent rain related to a seasonal monsoon and La Nina weather event.
This would push international free-on-board prices to around $5,000 a metric ton or higher, said traders. Thai FOB rubber is now around $4,700/ton.
The Nation newspaper Tuesday reported flash flood warnings have been issued for the southern provinces of Satun, Trang, Songkhla and Phatthalung, while the Bangkok Post said at least 23 provinces have been hit by floods as of Tuesday.
“Some areas in the south are flooded, but the situation is not serious and we can still tap for a few days this week in some areas,” a trader in south Thailand said.
The south accounts for 80% of Thailand”s rubber output. Last year, the country produced 3.3 million metric tons of rubber, more than a third of global output.
Thailand has been experiencing unusual weather over the last year. Floods in the south affected rubber production in late 2010 and the first half of 2011.
Source: Dow Jones