Bangkok--Sep 16--AFET
AFET prepares to launch STR20 on September 27 and expects to increase liquidity in the Exchange by providing another channel for producers to manage rubber price risks during these times of surging global prices.
Khun Napaporn Kurupasutachai, President of The Agricultural Futures Exchange of Thailand (AFET), said that the Board of Directors had approved for Standard Thai Rubber Grade 20 (STR20) to be listed on AFET trading board beginning September 27, 2005. Three contract months (Jan 06, Feb 06, and Mar 06) will be available for trading.
AFET chose to list STR20 because Thailand is the world’s largest producer and exporter of natural rubber, having a market share of approximately 45 percent in 2003. The value of rubber export alone was approximately 20 billion baht in 2004. Therefore, the natural para rubber industry is one of the most important sector in the country and listing another rubber product on the futures exchange reflects the competitiveness of this industry. Furthermore, STR20 is considered to have more stringent quality and standard than other similar rubber products traded on Tokyo and Singapore exchanges.
AFET President also said that this was probably the right moment to list STR 20 on the trading board as para rubber has recently become a very attractive and interesting underlying product and has the highest trading volume on the exchange. Besides, the continuous increase in oil prices has pushed up the price of synthetic rubber forcing an increasing number of manufacturers to switch over to use natural rubbers as substitute.
“We expect STR20 to trade well in the market, with lots of orders from investors as we can still see high demands of rubber. And as oil prices are very volatile now, natural rubber could be the best choice as a substitution for synthetic rubber. In addition, STR20 is another investment option for investors and will increase trade volume for the market as well. This is because arbitraging can be applied to generate profits and entrepreneurs will be able to hedge more easily.”
“We are not expecting new investors to come in but hope to increase liquidity in the exchange by giving the current investors more products to play with. We are also studying the possibility to trade concentrated rubber latex and loose bale rubber as well,” said Khun Napaporn.
The deliverable grade of Standard Thai Rubber Grade 20 (STR20), will be as per the International Rubber Quality and Packing Conference or the Green Book from the Ministry of Agriculture and Cooperatives. The contract specification allows one trading contract to equal 5,000 kilograms or 5 metric tons. Minimum price fluctuation is 0.10 baht per kilogram. Daily price fluctuation limit is 1.70 baht per kilogram. Speculative position limit (for all long/short position combined) is not to be greater than 100 contracts in the delivery month, and not to be greater than 500 contracts in all contract months combined. Delivery term and conditions are set for FOB Bangkok or Laem Chabang port.
For more information please contact
Khun Namada at The Agricultural Futures Exchange of Thailand
Public Relations Department.
Telephone 0 2263 9827, www.afet.or.th End.