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Kochi, Sept. 19 The Cochin Rubber Merchants’ Association (CRMA) has demanded that like in the case of any other commodity, the Centre should allow free trade and movement of rubber without any control or restrictions imposed by the Rubber Board and also dispense with the Rubber Board Registration and Licence. This will enable the spot traders to have a level playing-field vis-À-vis the futures traders in rubber.

Addressing the 24th Annual General Meeting here, Mr N Radhakrishan, President of the Association said at the recent meetings held with various stakeholders, the Rubber Board Chairman had agreed to take up with the Forward Markets Commission the issue of compulsory Rubber Board Registration to be made applicable to all rubber futures traders. In order to contain the volatility in prices, it was proposed to curtail the daily ceiling on futures prices to a maximum of 2 per cent. It was also proposed to approach the FMC for directing the Exchanges to publish all details of the daily futures trade conducted by them, including individual positions, to bring transparency to the deals.

But, “we now understand that the Central Ministries concerned and the Forward Markets Commission are not inclined to consider the suggestions put forward by the Rubber Board favourably. We feel that FMC Chairman’s reported statement that in the absence of adequate hedgers, speculators shall be allowed to play their role unhindered in the commodity exchanges is against business ethics”.

He said unlike other commodities, production, consumption, processing, trading and interstate movement of rubber was regulated by Rubber Board, constituted under the Rubber Act enacted by Parliament. While spot traders require registration and licence as per the Rubber Act, they also have to abide by the rules framed there under. On the other hand, those taking part in futures trade are able to operate freely without Rubber Board or Sale Tax Registration until they effect physical delivery.

For all practical purposes it was not possible to pre-determine physical delivery against any particular deal made on the floor of exchanges, he said. Being an industrial raw material, the industries need rubber for consumption and hence, the growers and traders had to effect physical delivery, he pointed out. The speculators, who were responsible for the volatility in the market could currently escape the rules and procedures laid down by Rubber Board and other related economic and revenue departments of the Central and State Governments.

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