UPDATE 3-Rains, floods slash rubber output in main producers

* Output in Thailand, Indonesia, Malaysia to fall 6.7 pct

* Unseasonal rains cause floods, disrupt tapping

* Tight supplies may lift price to last year's peak
(Adds table)

By Lewa Pardomuan

SINGAPORE, Nov 30 (Reuters) - Rubber output in Thailand,
Indonesia and Malaysia will drop more than 6 percent in 2009
after unusually heavy rains caused flooding, an industry group
said on Monday, raising the prospect of a price rally to last
year's peak. Tight supplies blamed on bad weather have pushed
up cash prices by more than 10 percent in the past month, with
benchmark Thai RSS3 grade now hovering around $2.75 a kg --
within sight of a 56-year high of $3.25 struck last July.
[RUB/AS]

"Climate change has become an issue of serious concern on
the supply potential of natural rubber. Unpredictability of
climate limits the scope for developing and popularising
region-specific new clones," said the Association of Natural
Rubber Producing Countries.

"Apart from a fall in yield, even the traditional rubber
growing regions in major producing countries are gradually
being rendered unsuitable for growing rubber."

Output in the three main producers, which account for 70
percent of global output, could slip to 6.45 million tonnes in
2009, down from the October forecast of 6.62 million and lower
than 6.91 million estimated last year, according to the group.

The ANRPC, which collects output data from member
countries, also groups India, Vietnam, China, Sri Lanka and
Cambodia.

"It's possible for the price to go up to $3 sometime next
year. Let's say by February, the market can have a chance to
move higher because people will be looking at the wintering
season," said a dealer in Thailand's southern city of Hat Yai.

Torrential rain in Thailand's southern region since early
November has caused flooding in several areas, including Hat
Yai in Songkhla province, which has been declared a disaster
zone.

Around 800,000 hectares (2 million acres) of rubber land
has been hit by rain and flooding, which has disrupted tapping
and hampered transport, said dealers.

Supplies are likely to shrink further early next year
during the dry wintering season in Thailand, the world's
largest producer, as trees shed leaves and latex output falls.

Prices of rubber sheet, the raw material for RSS3, have
doubled from $1.10 per kg in December 2008, the lowest in
nearly seven years, due to steady demand while supply was cut
by unfavourable weather in Thailand, Indonesia and Malaysia.

"Rubber plantations in Thailand's southern region and the
north of Malaysia have been badly affected by flooding caused
by torrential rains throughout November," said the ANRPC.

"This indicates the possibility of a substantial downward
revision in the production anticipated for November 2009 and
for the year 2009," it added.

Thai rubber output was expected to fall to 2.9 million
tonnes in 2009, down from a previous forecast of 3.07 million
in October and lower than 3.09 million tonnes in 2008.

Production in Indonesia was forecast at 2.59 million tonnes
this year, higher than a previous estimate of 2.52 million, but
down from 2.75 million tonnes estimated last year.

Malaysia's output was pegged at 951,000 tonnes this year,
down from a previous forecast of 1.02 million, and lower than
1.07 million tonnes in 2008.

Tyres account for around 70 percent of global demand for
natural rubber, which is also used to make condoms and gloves.

ANRPC production trends ('000 tonnes)

2005 2006 2007 2008 2009
(1) Thailand 2937 3137 3056 3090 2900
Indonesia 2271 2637 2755 2751 2594
Malaysia 1126 1284 1200 1072 951
India 772 853 811 881 827
Vietnam 482 555 602 662.9 650.3
China 541 538 588 548 640
Sri Lanka 104 109 118 129.2 133.4
Total 8233 9113 9130 9134.1 8695.7
(1) Production for the year 2009 as anticipated in November.
Source: Reported by respective governments.
(Editing by Clarence Fernandez)
((lewa.pardomuan@thomsonreuters.com; +65 6870 3834; Reuters
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