Rubber factories restarting after Thailand floods
Rubber factories restarting after Thailand floods
BANGKOK (Reuters): Most rubber factories in the key Thai rubber trading town of Hat Yai partially resumed operations on Monday after rain and floods forced them to close last week, industry sources said.
However, the central rubber market in the southern Thai town remained closed, and it was not known when it would re-open.
"We resumed our operations partially today after flood waters receded," an official at a rubber export plant told Reuters by telephone.
It was expected to take a few more days before factories could completely resume business, the official said.
"We cannot totally resume operations at the moment as we need a few more days to clean up the mess caused by the floods," said an official at another Hat Yai-based factory.
On Monday, benchmark Thai RSS3 for February shipment was quoted at around U.S.66-67 cents per kg from Friday's 66 cents, exporters said.
Some factories needed to re-open as quickly as possible as they had to meet export obligations and had to load shipments for November and December, trade sources said.
Hat Yai, 1,250 km south of Bangkok, accounts for about 50 percent of the country's total rubber trading activity.
Thailand is the world's largest rubber exporter and produces around two million tonnes of the commodity each year.
No raw material has come onto the market since flash floods hit the town last Wednesday. Farmers are still unable to tap latex and rains are continuing, exporters in Hat Yai said.
The meteorological office said on Monday that rains would continue in southern Thailand for the next couple of days but would not be heavy enough to threaten further flooding.
By Monday, the flood situation in the town, with a population of 400,000, had improved significantly. Since Sunday evening the town was no longer isolated from the outside world.
All basic infrastructure including electricity, telephones and tap water was expected to be back on Monday, officials at the local rescue center said.
Exporters based in Hat Yai who had suffered losses due to the floods are expected to offer rubber at high prices to compensate, trade sources told Reuters.
Most of Thailand's big rubber exporting firms in the town had to suspend processing for a few days as workers could not report for work because of the floods.
The rain and floods also hit raw material supplies, boosting prices.
The suspension of rubber trade cost the market daily losses of at least 100 million baht ($2.3 million), officials said.
Several international buyers entered the Thai rubber market on Monday, seeking to buy for April onwards, trade sources said.
"Apart from that, the market is quiet as most end-users have already covered their positions up to January onwards shipment," said a dealer at a leading trading firm.