The winners of the Water Window Challenge will help communities in the Sahel, the Horn of Africa and South and Southeast Asia deal with floods and drought. (Reuters Photo/Dailynews)

Thai Rubber Producers Promise to Maintain Exports Despite Floods

JANUARY 31, 2017

Bangkok. Thai rubber exporters say they have enough of the commodity in stockpiles to ensure only minimal disruption to scheduled shipments in the wake of deadly floods in key growing regions.

Global rubber prices this week soared to five-year highs on worries over supply following floods that started in December, swamping plantations in the world's top producer at the height of the tapping season.

But Thai exporters of rubber, used to churn out everything from tires to surgeons' gloves, told Reuters they did not expect any major impact on shipments due to stocks already in place.

"Exports are still happening in January and should still be fine in February because most traders have stocked up supplies since November," Chaiphot Ruangwarunwathana, president of the Thai Latex Association, said.

A.T.S. Rubber in Nakhon Si Thammarat, the heart of the rubber growing region, said it had plenty of unsmoked sheets in stock to turn into coagulated rubber for export.

Domestic supply will also receive a boost when the government auctions about 100,000 tons of rubber from state stockpiles on Feb. 14, Luckchai Kittipol, honorary president of the Thai Rubber Association, said.

Thai farmers usually stop tapping rubber during a wintering season from March to May, so exporters are looking to replenish their supplies at the state auction, Korakod Kittipol, marketing manager at Thai Hua Rubber Pcl, a major Thai rubber exporter, said.

Prices for unsmoked USS3 rubber sheets in Nakhon Si Thammarat were quoted at 88.77 baht ($2.5) per kilogram on Monday (30/01), the highest in more than four years, according to Reuters data.

Thailand's rubber industry body has said it expects output to fall by 7.6 percent this year to 4.38 million tons as a result of the floods.

Some small traders might have faced delayed shipments, but floods in the south have already receded in some areas, allowing farmers to resume tapping this week, Somporn Thammachart, general manager of Chana Latex in Songkhla, which exports latex to Europe and Asia, said.

"I'm not worried," Somporn told Reuters. "There were some small delays last week, but we should be able to complete those orders within the next week."

Thavorn Para Rubber Industry in Songkhla, southern Thailand, also said it was still able to ship about 20,000 tons of latex to China as it does each month.