Authorities projected a loss of around 10% of rubber output in the 2016-17 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 Jan 1, 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 tonnes 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 rai 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,” Mr Uthai told Reuters.
Thai benchmark USS3 rubber was quoted at 81.05 baht per kilogramme on Thursday, a significant jump from 71.04 baht on Dec 29, before the floods started, according to data kept by Reuters.
The 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.