In futures market, both actual physical delivery and cash settlement are practiced. But mostly, cash settlement is preferred as to speculate for difference of prices at different time.

Direct trade between exporters and users is highly practiced due to disclosure of real prices and convenience. Direct trade is performed according to international contracts which are mutually recognized between sellers and buyers such as IRA contract. The most important principle of direct trade is that both buyers and sellers must abide by the rules and regulation of delivery quantity and quality at the fixed time as well as punctual and full payment as per the contract specification.

However, due to slowing economy and rubber price volatility, cancellation of contract and refusal of delivery and payment in certain traders occur. This practice is likely to increase, wreaking havoc with rubber market.

In response to the said problem, the Thai Rubber Association cooperates with other rubber associations under ARBC framework, comprising of Cambodia, Indonesia, Singapore, Thailand and Vietnam to prevent and solve the problems with relevant measures. ARBC Assembly encourages its members to exercise extreme caution in dealing with errant parties and publish their names on ARBC’s website. Additionally, ARBC-China Liaison Committee is established so that the industry can continue to prosper as a healthy and honourable industry through various measures against contract defaulters.

The Thai Rubber Association expects to see active participation between rubber sellers and buyers in the global market to uphold contract sanctity in the otherwise honourable rubber trading practices for further development of global rubber market.