Rubber Merchants Assocation decries Futures Trading

Kochi, Jul 2 (UNI) The Forward Markets Commission direction to the commodity exchanges to limit daily fluctuations to four per cent will not halt the malpractices in the Rubber Futures Trade by speculators, Cochin Rubber Merchants Association president N Radhakrishnan said today.

In a statement here, Mr Radhakrishnan said if a total ban on Rubber Futures Trading could not be enforced, at least the limit for daily fluctuation should be restrained to one per cent at the first instance and subsequently to another one per cent cap after a reasonable cooling off period.

At present, the fluctuation is upto six per cent.

He said the Commission was aware that for many decades the annual average domestic rubber prices were higher than the international prices. However, since the advent of Futures Trading, average prices of Indian rubber had started declining and in 2006-07 it was lower by Rs.5.75 per kg. compared to the international price.

As of now, the price difference was over Rs.12 per kg. The Futures prices in the past 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. at the start of January 2007 had remained so at the end of June.

Thus the growers, for whose benefit the Futures was introduced, were at the receiving end and have suffered heavily on account of Futures Trading, he added.

UNI