Thailand floods could cut rubber output by $140 million, authority says

BANGKOK, Nov 27 (Reuters) - Severe floods in Thailand's southern region could cut rubber production in the world's largest producer by as much as 90,000 metric tons, worth 4.5 billion baht ($140 million), the national rubber authority said on Thursday.

Flood waters in the world's top rubber producer and exporter have inundated 4.1 million rai (656,000 hectares) of planting areas, affecting more than 160,000 farmers, the Rubber Authority of Thailand's chairman Perk Lertwangpong told Reuters.

An estimated 40,000 tons of rubber production has already been lost in nine provinces, Perk said.

"By the time the floodwaters recede and production can resume, the loss could potentially double," he said, reaching as high as 90,000 tons.

"Some areas have been hit very hard."

Supply concerns pushed up Japanese rubber futures on Thursday.

In 2023, more than half of Thailand's total rubber cultivation area of 24 million rai was located in the country's south, including the hardest-hit province of Songkhla, according to Krungsri Research.

The overall economic impact is estimated at about 25 billion baht ($776 million) so far, said Burin Adulwattana, managing director of Kasikorn Research Center. He added that if factories were unable to operate and money was not circulating, the impact could be even bigger.

Some 630 mm (24.8 inches) of rain has fallen around Songkhla's capital Hat Yai since last Wednesday, higher than a previous peak of 428 mm in 2010, according to the country's Geo-Informatics and Space Technology Development Agency.

At least 33 people have been killed in the floods in Thailand and two in neighbouring Malaysia, with tens of thousands of residents huddling in evacuation centres, some after being cut off for days by waters as much as 2 m (7 ft) high.

Integrated rubber producer Sri Trang Agro-Industry (STA.BK), opens new tab said on Tuesday its manufacturing facilities in the flooded areas had been affected.

Its Sri Trang Gloves (STGT.BK), opens new tab unit, a major rubber gloves producer, said production had been suspended at affected facilities because staff were unable to get to work and water had overflowed into some operational areas.

In 2024, after southern Thailand and neighbouring Malaysia were hit by floods, Thai rubber output dropped by 3% to 4.99 million metric tons, with 3.86 million tons exported, according to the rubber authority.

($1 = 32.20 baht)

Reporting by Thanadech Staporncharnchai and Orathai Sriring; Editing by Kate Mayberry

Read more: here.