According to Forward Market Commission (FMC), Futures trading in natural rubber was 23 lakh tonnes during the year 2010-11. But physical delivery of natural rubber in futures market was just 16,000 tonnes. Rubber Board has already made a recommendation for reduction in intraday circuit limits in futures trading.
The natural rubber consuming industry has written to FMC to either put rubber futures on hold or keep intraday price fluctuation limit from the current 4% to 1%. All India Rubber Industries Association (AIRIA) president Vinod Simon says that speculation in domestic futures gave least consideration to demand-supply fundamentals. It is quite puzzling why should domestic natural rubber prices hold significantly higher than international prices when we are in midst of peak production months and carrying more than 2.5 lakh tonnes as suggested by Rubber Board.
Automotive Tyre Manufacturers Association (ATMA) has also pointed to speculation in futures impacting the spot market. The recently expired November contract had open position of 1,491 tonnes on 1st November, and stocks in warehouses of just 110 tonnes. This held the contract under pressure till expiry. Resultant trends were just not in sync with fundamentals.
The intraday circuit limits were increased to 4% to increase liquidity as natural rubber prices had dropped significantly three years ago. However, at current prices, the futures can be legitimately taken up or down by Rs.8 a kg on the same day.
Today, the spot rubber RSS-4 grade closed at Rs. 190 a kg at Kottayam. The December series slipped to Rs 191.80, January to Rs 193.50, February to Rs 195.25 and March to Rs 197.25 a kg on National Multi Commodity Exchange (NMCE). RSS-3 grade increased to Rs 173.73 a kg at Bangkok. The November futures finished marginally higher at ¥254.08 on Tokyo Commodity Exchange (TOCOM).
Most probably on 18th November Indian Stock Market will open in red and if so happens then one can expect domestic natural rubber prices moving further down.
Read lot more in Rubber4U – 1st December 2011 issue
The natural rubber consuming industry has written to FMC to either put rubber futures on hold or keep intraday price fluctuation limit from the current 4% to 1%. All India Rubber Industries Association (AIRIA) president Vinod Simon says that speculation in domestic futures gave least consideration to demand-supply fundamentals. It is quite puzzling why should domestic natural rubber prices hold significantly higher than international prices when we are in midst of peak production months and carrying more than 2.5 lakh tonnes as suggested by Rubber Board.
Automotive Tyre Manufacturers Association (ATMA) has also pointed to speculation in futures impacting the spot market. The recently expired November contract had open position of 1,491 tonnes on 1st November, and stocks in warehouses of just 110 tonnes. This held the contract under pressure till expiry. Resultant trends were just not in sync with fundamentals.
The intraday circuit limits were increased to 4% to increase liquidity as natural rubber prices had dropped significantly three years ago. However, at current prices, the futures can be legitimately taken up or down by Rs.8 a kg on the same day.
Today, the spot rubber RSS-4 grade closed at Rs. 190 a kg at Kottayam. The December series slipped to Rs 191.80, January to Rs 193.50, February to Rs 195.25 and March to Rs 197.25 a kg on National Multi Commodity Exchange (NMCE). RSS-3 grade increased to Rs 173.73 a kg at Bangkok. The November futures finished marginally higher at ¥254.08 on Tokyo Commodity Exchange (TOCOM).
Most probably on 18th November Indian Stock Market will open in red and if so happens then one can expect domestic natural rubber prices moving further down.
Read lot more in Rubber4U – 1st December 2011 issue
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