The Hindu : Business : Merchants call for futures market for rubber

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Wednesday, Oct 04, 2006
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Merchants call for futures market for rubber

Staff Reporter

Association president says traders bear the brunt of fluctuations in rubber prices

KOCHI: The Cochin Rubber Merchants' Association has called for developing a "healthy futures market" for rubber in India that will be "complementary to the interest of physical trade, and with active participation of growers and consumers."

N. Radhakrishnan, president of the Association, said at the 23rd annual general meeting of the Association here last Saturday that traders bore the brunt of the wide fluctuations in rubber prices in the recent months.

In spite of the precarious stock level in the country, the prices had fallen from Rs.115 a kg to Rs.78 a kg during the past three months, he said. He also pointed out that the stock of natural rubber in the country stood at 52,000 tonnes, an "all-time low", over the past two decades.

However, there have been wide fluctuations in the price of natural rubber owing to the "influence of Indian futures, which in turn is following the international futures market." The fluctuations have taken place despite the low stock in the country, said the press release.

The country had the highest ever stock of 2,20,000 tonnes in January 2001. The dealers and growers together had over 1,80,000 tonnes of rubber against the present estimated stock of around 25,000 tonnes with them

The association press release said that rubber dealers were the back-bone of the rubber sector as they acted as a link between growers and consumers and ensured that rubber reached all over the country. Indian growers get around 98 per cent of the terminal market price whereas their counterparts in other countries get around 85 to 90 per cent.

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