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M.R. Subramani

Chennai, Oct 7 Between September 8 and 11, the prices of RSS-4 (ribbed smoked sheet) ruled at a record Rs 141 a kg. On Tuesday, the rates had dropped to Rs 95 a kg.

“The prices have crashed by Rs 40 a kg in the last fortnight and by Rs 18 in the last three working days! This is an unprecedented fall,” said Mr N. Radhakrishnan, President of Cochin Rubber Merchants Association.

More importantly, domestic prices, which ruled at Rs 10 a kg higher than the rates in the global market, are now quoting Rs 10 lower than the international market.

“The crash in prices following the plummeting of commodity prices globally has put traders in a disarray. Dealers usually buy and stock material for the users. But when prices crash like this, they cannot do anything,” said Mr Radhakrishnan. For example, due to the price crash in the last two days, a trader who has to stock 10 tonnes would stand to lose Rs 2 lakh and more.

The industry was not supporting the trade, he charged. “They are standing aloof. It is not that they are not in market but when they have to buy say 2,000 tonnes, they are buying only 100 tonnes,” Mr Radhakrishnan said.

Traders sometimes advance money to growers. If traders, who are the main contact for the growers with the users, were to be affected, then farmers would also be affected badly.

With the margins for traders being a meagre 0.5 per cent, traders are staring at the bottom of the barrel in the current crisis.

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