Leading commodity bourse Multi Commodity Exchange (MCX) will commence trading in rubber futures from Thursday.

Initially, contracts ending in September, October, November and December will be available for trading. The underlying quality of the contract is the Ribbed Smoked Sheets 4 (RSS-4) and the lot size is one tonne with a compulsory delivery option. The price for 100 kg is quoted ex-Kochi (Ernakulam), exclusive of all sales tax and GST.

The contract will provide a hedging solution to rubber value-chain participants, including growers, traders, exporters, importers, and tyre manufacturing companies, among others.

Mrugank Paranjape, Managing Director, said that with the launch of this new contract, the exchange expects to provide transparent and fair benchmark prices that closely reflect supply and demand fundamentals in the physical rubber market.

Sibi J Monippally, General Secretary, Indian Rubber Growers Association, said the rubber futures contracts are absolute necessary for price risk management and hedging and will act as a domestic benchmark price.

India is the sixth largest producer and second largest consumer of natural rubber in the world. Owing to its unique qualities, when compared with the elastomers and synthetic rubber Indian natural rubber is the preferred raw material for related businesses. Rubber caters to a spectrum of industries such as automobile, aeronautics, electrical and electronics, materials handling, health care, power transmission, etc.

Natural Rubber production in India during the year 2017-18 was 694,000 tonnes and the consumption was up six per cent at 11,12,210 tonnes. As per data available from the Directorate General of Commercial Intelligence & Statistics, the country imported 469,760 tonnes of natural rubber in 2017-18.

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