Rubber Board asks FMC to curb futures trading limit

Rubber Board asks FMC to curb futures trading limit
Move can check sharp increase in prices.
“We had earlier recommended to the FMC to limit the fluctuation to two per cent and they had implemented it. This year prices have increased sharply and we have asked the Commission to introduce the curbs again.” — Mr Sajen Peter, Rubber Board Chairman


Coonoor, Sept. 14

The Rubber Board has asked the Forward Markets Commission (FMC), which supervises the functioning of commodity exchanges in the country, to curb the intra-day price fluctuations in rubber futures to not more than two per cent.

“We had earlier recommended to the FMC to limit the fluctuation to two per cent and they had implemented it. When the prices fell last year, we agreed for removing the curbs. However, this year prices have increased sharply and we have asked the Commission to introduce the curbs again,” said Mr Sajen Peter, Rubber Board Chairman, on the sidelines of the 117th United Planters Association of Southern India annual conference.

Currently, futures price can rise or drop two per cent initially during a trading session. Once the ceiling or floor is hit, then trading in the particular commodity futures is stopped for a stipulated period of half-an-hour. After this if the price rises or drops another two per cent, then trading for the day is frozen.

What the Rubber Board wants is that trading should be stopped once the price rises or drops one per cent. Then after the cooling period gets over, the price can rise or drop another one per cent.

Asked when the issue was raised of late with the FMC, Mr Peter said: “We are raising it every month.”

This is seen as a move to assuage the user industry which has been demanding ban on futures. The board is against ban on rubber futures and has not endorsed such a proposal from the user industry.

To a question on import duty on rubber, he said the board had recommended a 20 per cent duty limited to Rs 20.46 a kg based on the domestic prices during the last three years.

Mr Peter said though the board has estimated that imports would be 70,000 tonnes this fiscal, it could exceed to over one lakh tonnes.

Export initiatives

Asked about export initiatives, he said there was no need for exports since a supply shortfall of 85,000 tonnes was likely.

“We would like rubber to be made available to the domestic industry provided it will pay international prices to Indian farmers,” the Rubber Board chief said.

He said for two-three months, domestic prices had gone above global prices and he had cautioned the growers at every available fora. “Prices are now almost on par with global rates. We think the Indian farmer has every right to get a price what a grower in Kuala Lumpur or Bangkok gets,” he added.

Rubber production was expected to be better this year and during April-August of the current fiscal, it had increased five per cent. “Last year, the production was hit due to various factors including weather,” he said.

During the current fiscal, rubber production is projected to be a record 8.93 lakh tonnes against 8.31 lt last fiscal.



Mixed trend in rubber


Kottayam, Sept. 14

Physical rubber prices showed a mixed trend on Tuesday.

According to observers, traders stayed back on sheet rubber possibly since its futures on NMCE shed the gains partially followed by selling at higher levels.

The reports from the international markets were also depressing.

Sheet rubber finished flat at Rs 169 a kg in the main marketing centres. The grade improved further to Rs 168.50 (168) a kg in the official website of the Rubber Board.

Futures decline

The September series for RSS 4 declined to Rs 170.19 (172.46), October to Rs 167.33 (169.82), November to Rs 167.35 (169.25) and December to Rs 168.70 (171.09) a kg on National Multi Commodity Exchange (NMCE). The volumes totalled 4644 lots. The turnover was 78.55 crores and open interest 3,690 lots. RSS 3 (spot) moved down further to Rs 162.36 (163.52) a kg at Bangkok.

Spot rates were (Rs/kg): RSS-4: 169 (169); RSS-5: 165 (165); ungraded: 161 (162); ISNR 20: 155 (154) and latex 60 per cent: 115 (114).


Financial aid for beekeepers to continue


Kottayam, Sept. 14

The Rubber Board has decided to continue the scheme for financial assistance for adopting beekeeping as an extra income generation activity, in 2010-11 too, with a total outlay of Rs 90 lakh.

The scheme will be implemented through the Rubber Producers' Societies (RPSs) and Self-Help Groups (SHGS).

Members of the RPSs/SHGs having rubber area up to 2.00 ha are eligible to get financial assistance under this scheme. Preference will be given to women SHGs. Each RPS/SHG can enrol 10-20 participants for the scheme.

Financial assistance will be extended for Indian and European honeybees at the same rate. Four beehives with colonies and allied equipment will be considered as one unit. An amount of Rs 3,000 or 50 per cent of the total cost of the hives and other equipment, (whichever is less) will be given as subsidy to each unit. The assistance to a beneficiary is limited for one unit only. The RPS/SHG will get Rs 30,000 to Rs 60,000 based on the number of beneficiaries.

Beehives, colonies and other equipment should be purchased from agencies approved by the Board. The RPS/SHG can decide on the number of equipment (other than beehives and colonies) to be purchased on need basis, with the approval from the Regional Offices concerned.