Monday, October 17, 2011

Thai floods delay sugar crushing, unlikely to hit rubber

BANGKOK: Thailand's worst flooding in five decades is expected to delay the 2011/12 cane-crushing season by a few weeks to late November but crop damage is likely to be limited, senior industry officials said on Monday.

Crushing had been expected to start by late October or early November.

"The crushing season could start slightly late due to the flood," said Prasert Tapaneeyangkul, secretary-general of the Office of Cane and Sugar Board (OCSB), which oversees the country's sugar sector.

"We could start crushing the 2011/12 sugar season by late November when we will be able to say how much cane has been damaged."

The 2011/12 cane crop damage was still unclear and no official output estimation was available.

But, traders and industry officials said they still believed Thailand could produce around 100 million tonnes of sugar cane, which equates to around 10 million tonnes of sugar, the highest ever.

However, some traders said they expected Thailand to produce 95-100 million tonnes of cane or around 9.5-10.0 million tonnes of sugar.


The floods are unlikely to have any direct impact on the rubber industry, as most rubber factories and trading are located in the south, which has not been affected.

However, rubber supply was expected to fall eventually in the near-term due to seasonal monsoon rains that disrupted tapping normally in October and November.

"We expect annual production lower than the government forecast of 3.2 million tonnes as we were worried that the rainy season could be longer than expected earlier," Pongsak Kerdvongbundit, president of the Thai Rubber Association told Reuters, without giving further details on the level of production.

However, industry officials and traders estimated that Thailand could produce around 3.0 million tonnes this year.

Another factor than could impact Thai rubber production was a plan to cut down rubber trees to prop up prices, traders said.

Early this month, Thailand, which is the biggest producer and exporter of rubber, aimed to cut supply by 3.5 percent this year in a bid to boost prices.

The country, which is also the biggest rice exporter, had to delay shipments of rice by a few weeks as floods disrupted logistic systems, the Rice Exporters Association said.

"The flood disrupted logistic systems, especially along the Chao Phraya River down to the Bangkok seaport that forced exporters to delay shipments," Korbsook Iamsuri, president of Thai Rice Exporters Association told Reuters.

The Ministry of Commerce estimated rice crop damage of 6-7 million tonnes of paddy. However, the exporters association expected smaller damage of around 4 million tonnes.

Wanlop Pichpongsa of Capital Rice, a leading Thai exporter said: "Shipment could be delayed for a few weeks as some flood-hit exporters need more time to tackle flood disruption."

The flooding which has covered a third of the country since July 3 had killed least 307 people. ' Reuters


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