Thailand Futures Exchange PCL (TFEX) has entered into a Memorandum of Understanding (MOU) with the Rubber Authority of Thailand (RAOT) for collaboration to establish the standardized Rubber Reference Prices.
These benchmarks will serve as references trading transactions for both domestic and international players and facilitate the development of related products.
TFEX managing director Rinjai Chakornpipatsaid that the initiative is aim to develop a recognized Rubber Reference Prices for Thailand,
which will benefit both the rubber and relate industries.
“TFEXand RAOT aim for the reference prices to be widely accepte and use in trading transactions domestically and internationally. TFEX will calculate and publish the reference prices.
The methodology for established reference price will be publishe for general public to ensure transparency of the benchmark. TFEX and RAOT also have a plan to consult with the industry to explore the development
of rubber reference prices that comply with the European Union Deforestation-Free Regulation (EUDR). Besides, TFEX will further explore to utilize these reference prices for Rubber Futures product development,” said Rinjai.
RAOT governor Nakorn Tangavirapat said that even though Thailand is the world’s major rubber producer,
the country had relied on international rubber market prices as reference for its export contracts.
Domestic reference prices, reflect the costs of Thai rubber farmers
Development of its domestic reference prices will help reflect the costs of Thai rubber farmers and local producers. To address this issue, RAOT, the central agency overseeing the entire rubber industry including domestic
and export markets, has partnered with TFEX to develop the reference price calculation methodology for trading Thai rubber
with aims to ensure transparency and adhere to international standards.
The established reference prices will be publicly publishe, enabling relevant stakeholders to use them as a basis for determining contract prices for rubber exports (FOB prices). This development is expecte to enhance confidence among stakeholders in the rubber industry.
Under the collaboration, RAOT will gather and provide data on trading volumes, product information for various types of rubber, and other necessary information from RAOT’s central rubber markets in each province. TFEX will use such data to calculate reference prices. RAOT and TFEX will disseminate these reference prices.
“We firmly believe that this collaboration marks a significant step in establishing internationally accepted methodology to establish Thai rubber reference prices and will pave the way for Thailand to become a hub for the rubber product industry, ultimately benefiting rubber farmers and Thai rubber entrepreneurs by strengthening their livelihoods and ensuring career stability,” added Nakorn.
The MOU signing ceremony was held on June 12, 2024. The rubber reference prices will be calculate and publishe twice daily as follows: the price for Ribbe Smoke Sheet Grade 3 (RSS3) will be released at 12:00 hrs. (planne to launch in July 2024), while the prices for concentrate latex and block rubber will be announce at 19:00 hrs. (planne to launch in September 2024).
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