Business   

Merchants for curbs on rubber futures trading

Staff Reporter

‘Limit futures trade only to licence-holders’

KOCHI: The Cochin Rubber Merchants Association has appealed to the Forward Markets Commission to allow futures trade in rubber only to Rubber Board licence-holders.

It has asked the Commission to direct the exchanges to be transparent in their deals and make available the names of buyers and sellers, the quantity and price at which rubber is traded and the period of contract concluded. The Association has also wanted a cap on daily fluctuations at a maximum of two per cent

In a statement here recently, Mr. N. Radhakrishnan, President of the Association, pointed out that the Forward Markets Commission has directed commodity exchanges to limit daily fluctuations to four per cent instead of the existing six per cent. This directive will not be a deterrent to the speculators involved in rubber futures trading, he said. If a total ban on rubber futures trading cannot be enforced, at least the daily fluctuation should be restrained to one per cent at the first instance and subsequently to two per cent after a reasonable cooling off period, he added.

Mr. Radhakrishnan noted that the Commission is aware that for many decades the annual average domestic rubber prices were higher than the international prices. Since the advent of futures trading average prices for Indian rubber started registering a decline, and in 2006-2007 it was Rs.5.75 per kg. lower than the international price. As of now the price difference is over Rs.12 per kg.

The futures prices in the last six months fell by Rs.24 per kg., which has had an adverse impact on the ready market which fell by Rs.22 per kg.

But the international market, which started at around Rs.86 per kg. in the beginning of January 2007 , remained steady.

Printer friendly page  
Send this article to Friends by E-Mail

Stories in this Section

The global Indian phenomenon
Maharashtra attracts U.S. investment
SPML to raise Rs. 250 cr.
Document management outsourcing, the Xerox way
Efforts to achieve financial inclusion have failed
MSE to divest 51 p.c. stake
Merchants for curbs on rubber futures trading
Emap buys 40 p.c. stake in Next Gen Publishing
Foreign exchange reserves up $937 m

Copyright © 2007, The Hindu. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu