Rubber Board Against Ban On Futures Trade

Chennai: The Rubber Board does not favour any prohibition on futures trading in the commodity. At the same time, they will like the futures to have a positive effect on the growers. The share of profit of intermediaries in rubber trade is very low. Therefore, futures actually do not contribute much to the growers' return. The Board had called for a meeting of various players in the market a month back to discuss problems arising out of futures trade. Rubber dealers and the Automotive Tyre Manufacturers Association, the apex body of tyre companies that buy half the rubber produced in the country, had demanded a ban on futures trading.
It was also decided to recommend to the authorities that they should not allow more than two per cent fluctuation in prices in futures. The problem arose because a small number of large-scale holders were reported to have been behind the six per cent plus fluctuation in futures price in January. The Rubber Board had called for the meeting following complaints that the futures trade was being manipulated. Rubber for June delivery on the MCX on May 25, recorded a negligible turnover of Rs 44 lakh via just 49 trades, while July contract turnover amounted to Rs 15 lakh on 17 trades.