Floods hit Sumatra rubber factories, plantations

Floods hit Sumatra rubber factories, plantations

Grace Nirang, Reuters, Jakarta

Floods have inundated some rubber factories and plantations in Indonesia's top rubber growing area of North Sumatra, destroying stocks and disrupting supplies, industry sources said on Thursday.

Flooding triggered by days of torrential rains hit North Sumatra in the last week, leaving at least three people dead and forcing thousands more to flee their homes, officials said.

"Many rubber factories, mostly those located along rivers, with their rubber stocks are inundated," Suharto Honggokusumo, executive director of the Indonesian Rubber Association (Gapkindo), told Reuters.

"They are suffering a big loss because the rubber stocks affected have to be reprocessed, not to mention the damage of their equipment. We are still assessing the damage," he said, adding that Gapkindo's members in North Sumatra met on Thursday to discuss the damage.

One rubber trader in Medan, the capital of North Sumatra, said heavy rains had forced tappers to halt activities.

"I think these floods can halve this month's output," the trader told Reuters from Medan, some 1,425 (885 miles) northwest of Jakarta.

North Sumatra is Indonesia's biggest producing area of rubber and palm oil. It also produces coffee and cocoa.

Indonesia is the world's second largest producer of rubber and palm oil, the third for cocoa and the fourth for coffee.

The floods have also disrupted transportation from plantations to processing plants and made oil palm fresh fruit bunches wet and mouldy.

"The roads are full of mud...trucks bringing fresh fruit bunches cannot reach processing plants while those from plants cannot go to port. The heavy rains and high seas have also disrupted shipments," Derom Bangun, chairman of the Indonesian Palm Oil Producers Association (GAPKI), told Reuters.

Officials at Belawan, the main palm oil export port, said shipments had been disrupted after a dredger sank at the port due to high seas.

"The dredger is blocking the entrance to the port. We are trying our best to move it but it is difficult because of the high seas," Belawan administrator Tampa Napitupulu told Reuters from the port near Medan.

Palm oil traders in Medan said some export shipments to China and Europe were halted because vessels could not enter the port.

"Big ships cannot anchor at the port. Some exporters are thinking of using small ships to bring the oil to the bigger ships outside Belawan," one palm oil trader in Medan said.

Coffee traders said rains and floods so far have had no big impact on coffee trees since the arabica harvest in the province has ended last month and flowering for the next harvest has not started.

"The market is also very quiet because of New Year, no shipments so far," one trader said.