SICOM changes rubber terms<\/p>\n
SINGAPORE (AFP): The Singapore Commodity Exchange (SICOM)
\nannounced yesterday changes in the delivery terms of the most
\npopular rubber futures contract, TSR20.<\/p>\n
The contract's denomination was also changed to U.S. dollars
\nfrom Singapore dollars. TSR stands for Indonesian-produced
\nTechnically Specified Rubber.<\/p>\n
SICOM said it would introduce an October-December TSR20
\ncontract from Nov. 1 for trading on FOB (freight-on-board) terms
\ninstead of the current award terms under which delivery to
\ndesignated Singapore warehouses is specified.<\/p>\n
The existing TSR20 (award) contract will be traded until the
\nJuly-September contract months, and then phased out.<\/p>\n
AN FOB contract would remove the need for transport and
\nhandling of rubber shipments to Singapore from Indonesia, where
\nTSR 20 is produced, a SICOM official said.<\/p>\n
A seller would deliver the rubber to a buyer instead of having
\nto first bring it to warehouses here for prior inspection and
\ncertification by SICOM officials.<\/p>\n
"The TSR20 (FOB) contract will provide tremendous cost savings
\nfor traders, " a SICOM statement said. "With the better and more
\nconsistent quality of TSR20 produced these days, there is no
\nlonger any need to inspect and test every lot of TSR20 as is
\nstipulated in the award system."<\/p>\n
SICOM said its members would enjoy a 10-percent concessionary
\ntax for income derived from trading in TSR20 (FOB) contracts.<\/p>\n
International users will have the convenience of trading in
\nU.S. dollars instead of Singapore dollars.<\/p>\n
Hedging will become easier as the physical trade is conducted
\nin the U.S. currency, removing foreign-exchange risks, the
\nexchange said.<\/p>\n
TSR20 is mainly bought by American and European tire
\nmanufacturers. The volume of rubber traded under the contract
\nlast year surged 57 percent over 1994 to 828,780 tons.<\/p>\n
TSR20 consumption is expected to grow, given the tire
\nindustry's preference for natural over synthetic rubber, SICOM
\nsaid.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/sicom-changes-rubber-terms-1447893297",
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