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.