India: IRDF seeks transparency in rubber futures trading

India: IRDF seeks transparency in rubber futures trading
June 12, 2011




High volatility has been a major issue with the farmers
The worst hit under this scenario were small traders
Physical delivery in the NR futures trading is low
KOTTAYAM: The Indian Rubber Dealers’ Federation (IRDF) has called for steps to make the futures trading in natural rubber more transparent.

President George Valy says the high volatility has been a major issue with the farmers, traders, and the consuming industry ever since it was introduced. At present, the daily fluctuation comes up to four per cent (3 per cent plus 1 per cent for cooling period) of the price quoted. This means at a price of Rs.200 a kg, it can go up to Rs. 208 or Rs.192. This in real terms denotes a fluctuation of Rs.16 a kg for natural rubber.

He said the worst hit under this scenario were small traders who were the backbone of rubber trading and who had played a vital role in ensuring one of the highest farm gate price for the product in the world. The high volatility had made many of them keep off trading and this in term had hit the farmers, Mr. Valy said.

Mr. Valy said it was imperative to put the daily cap for futures trading at one plus one per cent .The high volatility may give enough scope for insider trading, he pointed out.

He pointed out that physical delivery in the NR futures trading was abysmally low. For May futures, which had a total volume of 2.5 lakh tonnes, the physically delivery was only 0.8 per cent. The consumer industries, trading community, and the Rubber Board had repeatedly made submissions for taking steps for ensuring a more transparent system so that unprofessional practices could be done away with, Mr. Valy said.

He said the IRDF had made submissions to Union Minister of State for Consumer Affairs and Food and Public Distribution K.V. Thomas and to the Chief Minister to look into the issue. The IRDF had been invited by the Union Minister for further discussion on the matter, Mr. Valy said.





Malaysia Apr Rubber Output Up 18pc on Year Malaysia
June 13, 2011


Malaysia produced 62,363 tonnes of natural rubber (NR) in April this year, an increase of 18.3 per cent when compared to a year ago.
However, on a month-to-month basis, output declined by 625 tonnes, or 0.9 per cent, the Statistics Department said in its rubber statistics summary released today.
It said the smallholding sector contributed 95.7 per cent of total output while the share from the estate sector amounted to 4.3 per cent.
The level of stocks in April 2011 fell by 30,377 tonnes, or 19.4 per cent, to 126,584 tonnes from the level in the previous month.
As for exports, 99,112 tonnes of NR were shipped in April 2011, which were down by 10.7 per cent when compared with the previous month but were higher by 44.8 per cent when compared with April last year.
NR imports in April 2011 amounted to 46,179 tonnes, a decrease of 21.5 per cent over the previous month, and was down by 6.4 per cent year-on-year.
Domestic consumption of NR in April 2011 was at 32,184 tonnes, a decline of 11.4 per cent over March 2011 and was down by 14.4 per cent year-on-year.
The average monthly price of latex concentrate in April 2011 continued to surge. Year-on-year, it increased by 38.1 per cent to 1,044.60 sen and average price for SMR 20 surged by 42.5 per cent to 1,490.38 sen.
(Business Times, Malaysia, June 10, 2011)





TOCOM rubber lacklustre, NMCE follows suit
June 13, 2011


TOKYO (Commodity Online): TOCOM rubber continues to be in red with July contract losing least (0.1 yen) and August contract losing most (4.5 yen) on 13.50 JST. The near month June contract was trading at 418.1 yen, a loss of 0.7 yen. November contract of far months was trading at 383.7 yen with a loss of 1.2 yen.

All NMCE rubber contracts are in red. June contract was traded for Rs.22550 after touching a high of Rs.22599 and a low of Rs.22447. Meanwhile August contract, subsequent to touching a high of 23250 and a low of 23165, was seen trading at the latter price.

Also, with concerns looming pertaining to the economic slowdown in US and China, oil futures slid 0.6% last week. This, along with strong dollar and possibility of surplus have played their part in bringing down rubber prices.

Meanwhile firm demand is expected to reflect in the steady trading of Malaysian rubber this week.

On a week-to-week basis,Malaysian Rubber Board’s official physical noon price for tyre-grade SMR 20 jumped 1.5 sen to 1,390.5 sen per kg from the previous Friday’s 1,389.0 sen per kg. Latex in bulk dropped by 5.5 sen to 941.5 sen per kg from 947.0 sen per kg previously.






Japan Rubber Stocks Fall 3.5 Pct By May 31 versus May 20
June 13, 2011

Japan’s crude rubber inventories fell 3.5 percent in the period from May 20 to May 31, industry data showed on Monday (June 13), reflecting firmer demand from automakers as their production gradually recovered from disruptions after a massive earthquake in March.
The Rubber Trade Association of Japan data showed that crude rubber inventories as of May 31 at 7,691 tonnes were nearly double the year-earlier level of 4,054 tonnes.
Rubber stocks fell steadily around this time last year as persistently high prices in producing countries put rubber futures prices on the Tokyo Commodity Exchange at a discount to physical prices, making shippers reluctant to deliver cargoes to Japan.
So far in 2011, crude rubber stocks have mostly steadied above 7,000 tonnes.
Following are details of the association data (in tonnes):