Thailand Futures Exchange (TFEX) has signed a memorandum of understanding (MoU) with the Rubber Authority of Thailand (RAOT) to jointly establish standardised rubber reference prices for both domestic and international players.
TFEX managing director Rinjai Chakornpipat said the initiative develops recognised rubber reference prices for Thailand, which benefits rubber and related industries.
"TFEX and RAOT expect the reference prices to be widely accepted and used in trades, both domestically and internationally," she said.
TFEX, a unit of the Stock Exchange of Thailand, plans to calculate and publicly publish the reference prices and methodology for the price calculation to ensure transparency of the benchmark.
TFEX and RAOT also plan to explore the development of rubber reference prices that comply with the European Union Deforestation-Free Regulation.
TFEX is also considering the possibility of utilising these reference prices for rubber futures products, said Ms Rinjai.
RAOT governor Nakorn Tangavirapat said while Thailand is one of the world's largest rubber producers, the country has relied on international rubber prices as a reference for export contracts.
Development of domestic reference prices will reflect the costs of Thai rubber farmers and local producers, said Mr Nakorn.
The publication of these reference prices will enable relevant stakeholders to use them as a basis for determining contract prices for rubber exports, he said.
Under the collaboration, the 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, said Mr Nakorn. TFEX is to use this data to calculate reference prices, with both entities disseminating the reference prices.
"The pact is expected to enhance confidence among stakeholders in the rubber industry," he said.
"This collaboration marks a significant step in establishing an internationally accepted methodology to determine Thai rubber reference prices, which should pave the way for Thailand to become a rubber product hub, benefiting Thai rubber farmers and traders by strengthening their livelihoods and ensuring career stability."
The rubber reference prices are scheduled to be calculated and published twice daily.
The price for ribbed smoked sheet grade 3 (RSS3), planned for launch next month, is slated for release at 12 noon, while the prices for concentrated latex and block rubber, set to be launched in September this year, are expected to be announced at 7pm.