BANGKOK, March 16 — Thai rubber production may be only 3.0 million tonnes in 2010, a senior industry official said today, cutting his forecast from the 3.15 million tonnes made in January due to severe drought.
"This year we would have around 3.0 million tonnes as the weather is expected to be very hot and dry. That could make rubber trees produce less latex," Luckchai Kittipol, president of the Thai Rubber Association, told Reuters.
Thailand, the world's biggest rubber exporter, produced 2.9 million tonnes in 2009 as rubber output was cut significantly by unseasonable rain.
Rubber supply has been falling gradually since late February as Thailand is in the dry season, when rubber trees shed their leaves and stop producing latex.
The dry season usually ends in late April. However, the Meteorological Department has warned that the El Nino weather pattern could bring a longer-than-expected dry season this year with lower rainfall and higher temperatures than usual.
Traders and farmers said they were concerned that a longer dry spell would cut moisture in the ground and that might mean there would be little latex when farmers resumed tapping in May.
Benchmark Thai RSS3 has recently risen to a 58-year high of US$3.31 (RM11) per kg, the highest since 1952, when the Korean war sparked a boom in commodity prices.
Traders said rubber prices could rise further, perhaps to US$3.50 per kg, the highest ever, if supply continued to fall.
"Prices should rise further as demand is rising due to the recovery in the global economy, but supply is falling due to drought," Luckchai said. — Reuters
(themalaysianinsider.com)
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