Thai floods to dent Q1 global rubber output: ANRPC

Monday, 16 January 2017 00:39 - - {{hitsCtrl.values.hits}}

Mumbai (Reuters): Global natural rubber output is likely to fall in the first quarter of 2017 as floods have disrupted tapping in top producer Thailand, the Association of Natural Rubber Producing Countries (ANRPC) said.

Output for the period is expected to fall 0.8% from a year-ago level to 2.44 million tons. However, annual production from the ANRPC members, which together account for about 92% of global output, could rise 4% to 11.2 million tons in 2017, after stagnating over the past three years, the association said in a statement on Friday.

“Due to floods, Thailand will be able to produce only 4.381 million tons of natural rubber during 2017 as against 4.741 million tons originally expected,” the association said.

Southern Thailand has suffered downpours since 1 January, resulting in flash floods that have killed 36 people. Global rubber prices JRUc6 have spiked on concerns about the impact on output.

Thai rubber authority expects 10% output loss after floods

Reuters: Thailand will lose around 10% of its rubber output in the 2016-2017 crop year after unseasonal flooding affected the country’s main growing region, a senior industry official said on Thursday.

Southern Thailand has suffered downpours since 1 January, resulting in flash floods that have killed 36 people. Global rubber prices have spiked on concerns about the impact on output.

“(Around a) 10% loss is expected for overall rubber output this crop year,” Chao Songarvut, deputy governor of the Rubber Authority of Thailand, told Reuters.

Thailand, the world’s biggest rubber grower and exporter, produced around 4.46 million tons of rubber in 2015, according to data from the Office of Agricultural Economics.

The nation’s production of the commodity was already under pressure due to drought last year, the official said.

About 700,000 rais (112,000 hectares) of land planted with rubber trees have been affected by the current floods, according to data from the Rubber Authority.

Benchmark TOCOM rubber futures rallied to a near four-year high on Thursday, extending gains into a third day, boosted by concerns over the flooding.

Local prices in Thailand were expected to rise due to the reduced production, said Uthai Sonlucksub, president of the Natural Rubber Council of Thailand.

“Traders are scrambling to find rubber for exports after they struck their deals in December, when rubber was cheaper,” Uthai told Reuters.

Thai benchmark S 3 rubber was quoted at 81.05 baht ($ 2.29) per kilogram on Thursday, a significant jump from 71.04 baht ($ 2.01) on 29 December, before the floods started, according to data kept by Reuters.

Thailand’s rainy season usually ends in late November, but this year heavy rain has fallen well into what should be the dry season.

Flooding regularly occurs in the May-November rainy season.