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Our Bureau

Kochi, May 15 National Multi Commodity Exchange of India Ltd (NMCE) is seeking permission of the Forward Markets Commission to settle the outstanding positions in rubber contract following the suspension of futures trade in the commodity.

The NMCE Managing Director, Mr Kailash Gupta, said that around 4,300 outstanding positions existed in the rubber contract when the trading was banned. Of this, nearly 1,200 were for the May contract and 1,800 for the June contract. While the rest were spread between the July and August contracts.

He told reporters here that NMCE had organised a meeting of its rubber trading clients in Kochi to discuss the issue. Most clients asked for compensation suffered by them following the abrupt ending of the futures trade; which NMCE plans to bring before the market regulator.

Mr Gupta pointed out that the futures was not responsible for the rise of rubber prices, as is evident during the last few days. Rubber prices in spot market have reached an all-time high of Rs 120 in Kottayam and Kochi, though futures trading was banned a week ago, he said. Rise in the price and supply of crude oil and other fundamentals are responsible for the firming up in rubber price. The perception of price rise because of future trading has to change and NMCE is working on it, he added.

Mr Gupta was hopeful that the futures trade in rubber will resume from September 8, after the four-month suspension.

Earlier, at the meeting organised by NMCE, the rubber traders in Kerala demanded compensation from FMC following the Government’s decision to ban rubber futures. If the Government decides to ban rubber futures, the same decision could in future be applied to other commodities like pepper, they said.

The meeting was organised to assess the damage caused due to suspension of running rubber futures. Over 750 traders had suffered losses by this decision.

Mr Anil Mishra, Chief Executive Officer of NMCE, pointed out that closing of the exchange would send wrong signals and it should never happen. The very concept of closing the trade was wrong, he felt. The Government appeared to have acted under pressure to take some steps to check inflation, but the action amounted to exerting control without addressing the real issue. Prices are not decided by the regulator or the commodity exchanges, he added.

More Stories on : Commodity Exchanges | Rubber

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