Futures detrimental to rubber sector

Kochi, May 10 (UNI) The volatile speculation in Rubber Futures is adversely affecting not only the daily trade, but also the smooth functioning of the rubber sector, according to Cochin Rubber Merchants' Association President N Radhakrishnan.

In a statement here today, he said the rubber growers were deprived of their due benefit during the peak production period last year since most of them were holding stock in anticipation of better prices. In spite of having heavy stocks and an all time high production, goods were not available to meet the demand and the industry resorted to more imports. This strange situation was created by speculators in Futures Trade who propagated that the prices would touch Rs 120 per kg in January 2007. This artificial shortage helped the hedgers sell their stocks at higher prices, he added.

The same sentiment was expressed by the representatives of the rubber trade, industry, small and large growers and processors during a meeting called by the Rubber Board Chairman last month.

The Association also urged the Centre to issue instructions to the Forward Market Commission to direct the Commodity Exchanges to desist from trading in Natural Rubber.

UNI