The exchange was launched in 2004 trading only in Ribbed Smoked Sheet Rubber no 3 (RSS3) and it followed up in 2005 by commencing trading in Standard Thai Rubber 20 (STR20). And at the end of March, Afet introduced futures contracts in concentrated latex.

Rubber is Thailand's most valuable agricultural product with production volume of 2.96 million tonnes in 2004.

The yield was put to use producing 1.7 million tonnes of ribbed smoked sheet, 1.07 million tonnes was moulded into blocks and 0.5 million tonnes were transformed into latex.

Latex is a key rubber product in terms of value. In 2003, the export value of concentrated latex reached Bt30 billion - 0.4 per cent of the country's total gross domestic product.

The growth in its production has expanded steadily in the last five years signifying that latex is an important material in a number of industries.

Concentrated latex is used in the dipping process when manufacturing rubber gloves, condoms, balloons, and rubber medical supplies.

In the carpet and fur industries, it is used as a coating to add rigidity. Apparel and shoes need latex for comfort and elasticity.

Latex is also used in the home furnishings sector as material for mattress, pillows, and cushions.

And to make you feel closer to latex than you have imagined, it is what your trendy wristbands are made from.

The only kind of latex listed on Afet's board is high-ammonia concentrated latex. It is made from latex that contains 35 per cent dry rubber, 5 per cent non-rubber solids, and water.

After processing, the raw material will transform into centrifuged latex containing 60 per cent concentrated latex before ammonia is added to make either high- or low-ammonia concentrated latex.

On the board, the product symbol is "Latex". Each contract includes 5,000 kilograms or 5 metric tonnes with contracts that deliver in up to six months.

Like other contracts in "The Rubber Family", trading in latex is vigorous. The volume has reached more than 200 contracts a day after only a month.

This is in line with ribbed smoked rubber (RSS3) and standard Thai rubber (STR20). However, the rise in trading volume and prices of "The Rubber Family" are mainly due to fluctuations in foreign currency and oil price as well as a rise in world rubber demand.

Due to its high potential, latex is expected to attract more investors and traders.

The new contracts provide greater opportunities to profit from another category of rubber products and an alternative to hedging against price risk due to its high volatility.

Those involved in the industry will benefit from a complete system of hedging mechanisms.

Moreover, a large number of buyers and sellers will lead to a generation of reference pricing which can be used as a benchmark for the whole industry.

Average trading volume has already reached 207 contracts per day in less than a month since its debut, certainly a sign of the potential for higher trading volume in the future.

Information for latex, including its spot price, is available on the websites of the Rubber Research Institute of Thailand, The Thai Rubber Association, Thai Latex Association, and certainly on the Afet's website.

However, prices may be shown for different kinds of latex depending on the content of the product.

They may require some adjustments before investors can use them to make precise investments and hedging decisions.

Latex will be one of the star products on the Afet and bring in much needed liquidity into the market.

As the bourse enters its third year of operations, rubber will be the main driving force fuelling the growth of the market.

Afet, again, has set a new precedent in the commodity futures industry by launching latex contracts for trade.

No other exchange in the world trades in latex contracts, which reflects the fact that Thailand will continue to keep its leading edge in the global rubber industry and be a trendsetter in pricing of the agricultural product.

Budsabawan Maharakkhaka is a professor at Sripatum University and former research officer at Afet.