Rubber futures down 9 pc as punters lie low
The recent uproar over excessive speculation in rubber trading in the commodity exchanges by planters and the industry seems to have prompted speculators to lie low for the time being.
By Ratna Ganguli, TNN |
KOLKATA: The recent uproar over excessive speculation in rubber trading in the commodity exchanges by planters and the industry seems to have prompted speculators to lie low for the time being.
In fact, a sudden slowdown in speculative trading saw the futures prices of natural rubber decline on Wednesday after a long gap. While the June delivery dropped by Rs 78 to Rs 8,828 per quintal, the July delivery dropped to Rs 8,927 per quintal.
The slide in futures prices and planters' urge to liquidate their stocks before monsoon also saw a drop in spot price of ex-Kottayam RSS-4 grade natural rubber, which declined by 250 to Rs 8,775 per quintal, and RSS-5 grade, which dropped to Rs 8,650 per quintal over the past two days.
Meanwhile, the drop in prices brought some relief to rubber goods exporters and the domestic industry, mainly small and medium units making footwear and auto parts. Industry sources said the easy trend is expected to continue at least till the next fortnight before the monsoon sets in in Kerala and Tripura in full vigour. A tight supply situation is expected during June-August when due to heavy rains, there would no rubber tapping. Considering this, the industry is likely to procure as much rubber as possible from the market to beef up their inventory of raw material in the next fortnight.
Irked by wild swings in rubber prices, induced by speculative trading in futures contracts at the commodity exchanges, planters and producers of rubber goods have been demanding to de-list natural rubber from the futures trading. Rubber Board chairman Peter Sajen recently wrote a letter to the Forward Markets Commission (FMC) asking the regulator to limit intra-day price fluctuations to 2 per cent against the existing permissible limit of 6 per cent.
This probably put a pressure on excessive speculation in the counter, said All India Rubber Industry Association president K T Thomas. Rubber price increased from Rs 8,000 to Rs 8,800 per quintal in the past three weeks.
In fact, a sudden slowdown in speculative trading saw the futures prices of natural rubber decline on Wednesday after a long gap. While the June delivery dropped by Rs 78 to Rs 8,828 per quintal, the July delivery dropped to Rs 8,927 per quintal.
The slide in futures prices and planters' urge to liquidate their stocks before monsoon also saw a drop in spot price of ex-Kottayam RSS-4 grade natural rubber, which declined by 250 to Rs 8,775 per quintal, and RSS-5 grade, which dropped to Rs 8,650 per quintal over the past two days.
Meanwhile, the drop in prices brought some relief to rubber goods exporters and the domestic industry, mainly small and medium units making footwear and auto parts. Industry sources said the easy trend is expected to continue at least till the next fortnight before the monsoon sets in in Kerala and Tripura in full vigour. A tight supply situation is expected during June-August when due to heavy rains, there would no rubber tapping. Considering this, the industry is likely to procure as much rubber as possible from the market to beef up their inventory of raw material in the next fortnight.
Irked by wild swings in rubber prices, induced by speculative trading in futures contracts at the commodity exchanges, planters and producers of rubber goods have been demanding to de-list natural rubber from the futures trading. Rubber Board chairman Peter Sajen recently wrote a letter to the Forward Markets Commission (FMC) asking the regulator to limit intra-day price fluctuations to 2 per cent against the existing permissible limit of 6 per cent.
This probably put a pressure on excessive speculation in the counter, said All India Rubber Industry Association president K T Thomas. Rubber price increased from Rs 8,000 to Rs 8,800 per quintal in the past three weeks.
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