Stakeholders demand necessary steps to control fluctuations in market
KOTTAYAM: A meeting of stakeholders, convened by the Rubber Board to discuss the implications of forward trading in natural rubber, has pointed an accusing finger to the futures trade which according to them should be brought under necessary controls as it had led to unhealthy and wild fluctuations in the indigenous market.
Speaking on the occasion, board Chairman Sajan Peter said the futures trading created a situation where a small group of people who were not real consumers could impact the rubber market. The board was keenly watching the fluctuations in the rubber market, which according to him were beyond normal market logic.
It was noted that the prices were ruling high even in peak production periods. On the other hand, unnaturally low prices were recorded in lean seasons. The board had taken the unprecedented step of issuing a warning to all, when the indigenous prices started ruling higher than international prices, Mr. Peter said. ``We have to ensure that futures market should have more positive impact on the market that negative ones,'' he said.
Kailas Gupta, representing the National Multi-Commodity Exchange (NMCE), said the wild fluctuations had come to their notice too. They had now directed the traders that the daily price fluctuations should not go beyond six per cent. He also did not agree with the contention that those who engaged in forward trading should get licences and registration and pointed out that many of those who engage in futures trading were not engaged in physical transaction.
Mr. Gupta's call for allowing six per cent price differentiation was questioned by most of the participants who maintained that the differentiation should be limited to two per cent to three per cent.
M.C. George, National Trusty, INFAM, said the physical realisation in forward trading contracts in natural rubber was only an abysmally low 1.6 per cent.