Flash floods hit southern Thailand rubber areas

BANGKOK Tue Nov 2, 2010 1:32pm IST

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BANGKOK (Reuters) - Heavy rains drenched the main rubber growing region in Thailand on Tuesday, flooding comercial hub Hat Yai, while 12,000 people were evacuated from bordering regions in Malaysia.

The downpours in the south of Thailand follow the worst flooding in decades in the northeast and centre of the world's biggest rubber exporter, covering a third of the country since early October.

The Department of Disaster Prevention and Mitigation says the national death toll from flooding is 104.

There were no immediate reports of deaths or injuries in the south, but water was reported to be as high as 2 metres (6 ft 7 in) in some areas and 80 percent of Hat Yai, the centre of Thailand's rubber trade, was flooded.

"The city is under water with no water and electricity. We estimate over 100,000 people are stuck in their homes," said Hat Yai's mayor, Prai Patano.

"In several hospitals, patients have been moved to higher floors, but the shortage of electricity, water and food is the main problem."

With telephone lines and electricity cut, rubber trading ground to a halt at the Hat Yai market.

Traders said the disruption to a major supply centre could push up the price of Thailand's benchmark rubber sheet towards the record high of $4.10 per kg it hit in April. It was offered at $4.05 per kg on Tuesday.

"The Hat Yai rubber centre is still open, but no one can bring rubber sheet to be traded there," said Jirakorn Kosaisawee, a senior Agriculture Ministry official.

Thailand's south produces around 90 percent of the country's annual output of about 3 million tonnes.

In neighbouring Malaysia, more than 12,000 people have been evacuated from northern states Perlis and Kedah, and other areas were on alert, state news agency Bernama said on Tuesday.

Traders in Malaysia said deliveries of rubber from Thailand have slowed down, creating some supply tightness for buyers in the rubber glove industry, which is dominated by Top Glove and Supermax.

"The floods have not hit the growing areas in Malaysia but the heavy rains are disrupting tapping activities," said a trader in Kuala Lumpur.

Malaysia is the world's No. 3 rubber producer, behind Thailand and Indonesia.

Output from Thailand routinely falls at this time of year, the rainy season in the south, but the flash floods were likely to make things worse. An industry official said farmers in more than half of the region's rubber areas had stopped tapping completely, which would cut output over the next few weeks.

"This could lead to a 20 to 30 percent fall in monthly rubber production in the region," said Prapas Ueranontat, secretary of the Thai Rubber Association.

Thai Prime Minister Abhisit Vejjajiva said on Sunday the country's worst flooding in decades could cut 2010 ecnomic growth by 0.3 percentage points, meaning growth for the year may not meet the 8 percent forecast by the central bank.

The government said on Monday it would give 5,000 baht ($168) in cash to each of 600,000 families affected by the floods, more than 3.7 million people in total of a population of 67 million.

(Additional reporting by Razak Ahmad and Niluksi Koswanage in Kuala Lumpur; Editing by Alan Raybould and Daniel Magnowski)

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