Rubber futures a useful hedge says NMCE CEO, traders worried over volatility
KOTTAYAM, INDIA (Commodity Online): Rubber traders
in Kerala, the South Indian State that produces over 90% of rubber in
the country, once again raised apprehensions about volatility created by
rubber futures trading and its lack of transparency at a Rubber
Investors meet jointly organised by Commodity Online Group and National Multi.
Anil Mishra, MD & CEO of NMCE, pointed out that futures provided a
perfect hedging mechanism for rubber growers , traders and consumers of
rubber. In the past few years, in its interactions with Automobile Tyre
Manufactures Association (ATMA) and All India Rubber Industries
Association (AIRIA), NMCE has been able to convince them on the value it
can generate through futures trading, he added.
Anil Mishra in a presentation packed with data and charts pointed out
that volatility was higher in rubber in Tokyo Commodity Exchange
(TOCOM) and other global exchanges but there was no daily price limits
set for contracts. He said that decrease in volatility will result in
fall in volumes. "Without futures, exchanges ,a monopoly will exist
between the farmers and dealers, depending upon who is powerful. Hedging
will only benefit both the sides,”he added.
Vice President of Indian Rubber Dealers Federation (IRDF) reiterated
their demand to cap daily fluctuation in prices either upward or down
ward by 2% in a 1+1 mechanism where trading would be first halted when
1% gain is reached as against the daily circuit limit of 4% at present
in 3 +1 format.
He also pointed out that due to lack of transparency, traders and
growers in Kerala were at a disadvantage while trading in futures and
hence losing money. Also, they demanded that tradres who did huge trade
volumes in anonymity profited from futures putting small rubber traders
and growers at a disadvantage.
Traders lack of trust in rubber
futures is evident from the rapid fall in volumes in rubber futures this
year, Jose Mambarambill said.
Roy Mathews,General Secretary of
Meenachil Taluk Rubber Dealers Association also stressed on the need for
more transparency in the rubber futures trading.
George Iype, Managing Director of Commodity Online Group
pointed out that despite the economic slowdown in India and
uncertainties in global economy on Eurozone debt crisis, the group’s
trading business from its subsidiary, Celebrus Commodities Ltd.
continued to show healthy volumes. This was the result of superior
customer service and faith put in by the members of the trading
community in Kerala, he said.
Saneesh Mathew, Branch Manager of
Celebrus Commodities Ltd welcomed the gathering and Alex John, Manager,
Business Development, proposed a vote of thanks. The meeting was
attended by leading rubber traders, growers and investors in the region.
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