And those investors who were closely following the market movements of the Agricultural Futures Exchange of Thailand (Afet) will find that the star commodity is indeed ribbed smoked sheet rubber No 3 (RSS3) contracts.

The RSS3 price has been climbing steadily for a while - in fact, from about Bt60 per kilogram last year to more than Bt100 this month. But last month, the price surge was an astonishing Bt82.50 to Bt104.50, a 27-per-cent increase.

Other types of natural-rubber contracts across the globe also displayed this kind of surge.

Local prices seem to be levelling off at above Bt100 a kilogram and are expected to remain high or climb further due mainly to varying demand and supply and the painful rise in fuel prices. Although a large amount of summer rain should result in well-watered, prosperous rubber trees, the long period of continuous rainfall in April and May made it impossible for farmers in the southern part of Thailand, the major rubber-producing area, to tap enough supply.

Not only has supply been staggered, but demand has also been pushing the price up even further still.

In Japan, the increasingly extensive use of rubber in the manufacturing sector has led to a decline in its rubber stocks.

The same is true for China, where an expansion in the toys, hygiene and medical industries has further fuelled already heated demand.

Compounding the problem is the reduction of the Chinese export tariff on tyres from 10 per cent to 3 per cent, allowing the country to export more cheaply and leading to a large increase in tyre orders.

Oil prices, which have already had a tremendous effect on all our lives, have also stretched the price of natural rubber since oil is used in the production process.

While rubber as a commodity has bounced into a new era, it is a blessing for the futures markets, and for Afet in particular. Afet liquidity has never been better, trading an average of 600 RSS3 contracts per day.

For investors, it is an opportunity to play the price fluctuations in the market and reap profits - an alternative means to make a quick baht while the stock market is still struggling in the doldrums.

Producers or manufacturers, on the other hand, are able to safeguard against price instability by using the futures exchange as a hedging mechanism.

Budsabawan Maharakkhaka, a professor at Sripratum University, wrote this article by invitation.

Budsabawan Maharakkhaka