Rubber hits record on AFET

Rubber prices hit record on AFETHeavy global demand for rubber has pushed the price of Ribbed Smoked Sheet No. 3 (RSS3), the most active product traded on the Agricultural Futures Exchange of Thailand (AFET), to a record high.

The delivery price of the August 2011 contract was 157.65 baht per kilogramme on Wednesday and reached the ceiling when the market opened in the morning session yesterday.

AFET executives said supply from the South was low because of the lingering impact of recent floods. Meanwhile, global demand for rubber has been soaring, especially in China as it want to stock up before the Chinese New Year. High demand from the automobile industry in India and Japan is also a factor.

Sureerat Khunthongchan, an analyst of Agrow Enterprise, an AFET member, agreed that the shortage of rubber supply had been caused by floods.

On a technical basis, she said, if the average price remains above 150 baht per kg, it would likely go as high as 220 baht. However, if the average stays below 150 baht, the price could drop to 114 baht.

Ms Sureerat said rubber contract volume on the AFET had increased to between 600 and 700 contracts per day, from 400 to 500 contracts in the past.

Early this year, AFET also plans to relaunch the Standard Thai Rubber 20 (STR20) contract as a new product.

(Source: http://www.bangkokpost.com/business/economics/214850/rubber-hits-record-on-afet)