Shanghai Futures Exchange (SHFE) is under the uniform regulation of China Securities Regulatory Commission (CSRC) and organizes the futures trading approved by CSRC. Currently, there are 14 futures contracts available for trading, including copper, aluminum, zinc, lead, nickel, tin, gold, silver, steel rebar, steel wire rod, hot rolled coil, fuel oil, bitumen and natural rubber. It has 196 members.

Shanghai Futures Exchange has organized the Shanghai Derivatives Market Forum for 16 sessions from 2004 to 2019. To mark the 20^th anniversary of Shanghai Futures Exchange, this year the forum was held under the theme of “20 Years of Dedication in Serving the Real Economy and Ushering in a New Era of Reform and Opening Up” on May 27-29, 2019 at Shanghai International Conference Centre with the support of China Securities Regulatory Commission (CSRC) and Shanghai Municipal Government. The forum aimed to promote the development of futures market and serve the real economy. It was well attended by about 400 representatives from domestic and overseas governments, financial institutions, industry associations and leading enterprises.

On this occasion, I was invited to give a presentation entitled “The Outlook of Natural Rubber Supply and Policy in Thailand” on 29 May 2019. In addition, Mr. Bundit Kerdvongbundit, Vice President of Von Bundit Co., Ltd. participated as a discussion panelist. Among the important matters of the forum are that China will encourage state owned enterprises, private companies and institutional investors to invest in futures products. China will internationalize domestic commodity futures market by inviting foreign investors to trade, continuously optimize the rules and regulations, enhance the ability of commodity futures market to serve enterprises in cross-border trade and  bolster the use of Chinese currency worldwide. More importantly, the introduction of TSR 20 (Technically Specified Rubber) in Shanghai Futures Exchange is a big step for rubber industry players. TSR 20 is a key raw material for tyre manufactures, among which China is the largest importer and consumer. The main source countries of imports are Southeast Asian countries as part of the "Belt and Road initiative" such as Thailand, Indonesia and Malaysia. In 2018, China imported 2.59 million tons of natural rubber (HS 4001) with the import value of US$ 3.60 billion. Out of these figures, TSR 20 import quantity is 1.60 million tons, accounting for 61% of total import quantity, with the value of US$ 2.31 billion, accounting for 64% of total import value (International Trade Center). Recently, China’s securities regulator has approved the launch of TSR 20 futures on Shanghai Futures Exchange although no launch date for the rubber futures was given. The development of TSR 20 rubber futures could provide price risk management tools for companies, helping us to lock in costs and safeguard profits.

The 16^th Shanghai Derivatives Market Forum is an important event which helps strengthen the expansion of Chinese rubber supply chain through the ‘One Belt One Road Initiative’ and helps foster a conducive environment to build a pricing system for the global natural rubber market to grow further incessantly.