August 30th 2023, Singapore, Helixtap Technologies, the independent AI-driven price and market intelligence provider for the rubber industry, today announces the launch of its ESG Price Assessments for SIR20 and AFR10. Helixtap’s ESG Price Guide is calculated to reflect the cost of sustainability initiatives to guide rubber producers, traders, tyre manufacturers and automotive buyers when negotiating fair pricing for both spot and long term contracts. Helixtap empowers the supply chain with independent data to first price and then benchmark sustainable natural rubber of SIR20 and AFR10 grades, which is a fundamental fiscal consideration when setting ESG goals, such as meeting the European Union Deforestation Regulation (EUDR) requirements. Helixtap Technologies has selected SIR20 for ESG Price Assessments as Indonesia is the second largest producer of natural rubber with 3.14 million metric tons produced in 2022, and AFR10 as the Ivory Coast is projected to become the third largest natural rubber exporter of US$936 million by 2026. 1 However, ensuring any spec of natural rubber is EUDR compliant will be no mean feat as the supply chain is populated with 6 million smallholders upstream, making it tedious to navigate. The first step would be to make it financially rewarding for those who comply.
Helixtap’s ESG Price Guide offers a fully independent reference point for all actors in the opaque natural rubber supply chain and in the myriad of rubber-related industries, such as tyre manufacturing, which consumes 70% of the world’s natural rubber production. Helixtap calculates two sustainability premiums on the basis of source and grade, which are revised when there are relevant changes on market calculations and utilises two methods – a percentage based premium and a fixed price premium.
The increase in ESG-focused legislature has created demand for new types of data, with a strong focus on traceability in forest-risk commodities with the passing of the EUDR, which has seen both denouncement by Indonesian palm oil adjacent rubber farmers and support by the Ivory Coast’s complementary sustainability initiatives, such as raising US$1.5 billion to restore Ivorian forests to combat climate change. 2 The lack of uniformity of ESG standards and ratings has created issues in compatibility of data, the onus of self-disclosure, the legal ramifications of non-disclosure, and so on. Helixtap’s ESG Price Guide is an objective solution to the incongruity of ESG data by offering a benchmark that is fully independent of the actors of the natural rubber supply chain, empowering objective business decisions when tackling ESG-related pricing
“We have the required tools and plans for complying with the EUDR, sustainability is a hot topic afterall. But our biggest challenge is bringing the suppliers on board, especially upstream where it’s less tech-savvy and accessible. They are only concerned about the dollar and cents of implementing this project – Helixtap’s ESG Price Guide would help,” said a large producer with factories across ASEAN.
Farah Miller, CEO of Helixtap Technologies explains, “Pricing guidance for EUDR compliant rubber is a critical first step in ensuring a fair price for both buyers and sellers. This empowers the rubber market with an independent guide for daily negotiations. Farmers, producers, and suppliers should have visibility on various premiums to encourage adoption of more sustainable practices and eradicate deforestation. Tyre manufacturers, automotive, and OEM companies should be able to make fair, informed decisions that are equitable. The ESG Price Guide seamlessly complements our Indonesian farmgate assessments; which will be an important tool navigating the upcoming uncertainties in the rubber market.”
About Helixtap Technologies
Helixtap Technologies are pioneers of groundbreaking, AI-driven price and market intelligence for the rubber industry. Helixtap Technologies publishes a proprietary physical rubber price index (GRIP), price forecasting, and in-house market research daily. Fully independent since its inception, Helixtap Technologies takes no positions in the rubber market and has zero influence on pricing.
Helixtap Technologies GRIP – Assessments
SIR20 FOB BEL/SBY basis
STR20 FOB BKK/LCB basis
AFR10 CIF Hamburg/Rotterdam basis
Implied AFR10 FOB Abidjan basis
Indonesian Farmgate Price
ESG Price Guide SIR20 FOB BEL/SBY basis
ESG Price Guide AFR10 FOB Abidjan basis
SMR20 FOB PNG/Klang basis
SVR10 FOB HCM basis
Bulk Latex FOB BKK basis
Indonesian raw material
Thai raw material
TSR20 Mixture CIF China Main Ports