The Hindu Business Line : Pala coop society to initiate farmers into rubber futures

IN a bid to attract more rubber growers to the commodity futures trading, the Kerala-based Pala Marketing Co-operative Society (PMCS) Ltd has chalked out a programme to introduce farmers to futures trading through the rubber producing societies in the State.

One of the largest primary co-operatives in South India, the PMCS has also started its own commodity future trading to become the first entity in co-operative sector to enter this area.

According to Prof K. K. Abraham, President of PMCS, a meeting of about 15 rubber-producing societies will be held next month under the aegis of PMCS and the Rubber Board to discuss their potential in futures trading.

For most of the rubber growers, the minimum unit of one tonne of rubber required for futures trading is an impediment to enter the market. To tide over this hurdle, the farmers can collectively participate in the futures market through the rubber producing societies.

"These societies collect rubber from the farmers and have good quantities with them. The societies can either choose to sell the rubber through the futures market or hedge their stocks (against price fluctuations)," he pointed out.

Although rubber futures trading is over a year old in India, farmers are yet to actively participate in the trading because of the requirement of one tonne quantity and other administrative processes such as licences.

Prof Abraham said the farmers should be given adequate training on the nuances of futures trading before they are introduced to the medium. "Farmers should not go for speculation in futures market. They should only sell and not buy," he said. "Inexperienced people can get into trouble (by speculating)." On PMCS's initiatives in the futures trading, he said the Society would have 25 franchisees by March next year. PMCS is affiliated to the Multi-Commodity Exchange of India Ltd (MCX) and National Multi Commodity Exchange (NMCE).

At present PMCS has tied up with Geojit for terminals, but over the next six months will have its own infrastructure in place, Prof Abraham said.

More Stories on : Rubber | Co-operatives | Commodity Exchanges

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