Leading commodity bourse MCX today announced launching of the rubber futures from August 16 to provide hedging to the entire value chain in the rubber industry. The MCX said it will offer four futures contracts in rubber with each ending September, October, November and December, respectively, an official statement said.

Investors are allowed to trade in the rubber quality of ‘Ribbed Smoked Sheets 4 (RSS4)’ for a minimum lot size of one tonne with compulsory delivery option, it said. The price to be quoted will be for 100 kg as per the Ex-Kochi (Ernakulam) rates, exclusive of all sales/GST, it added.

Commenting on the new product, MCX CEO and Managing Director Mrugank Paranjape said India is one of the major consumers and producers of natural rubber. “With the launch of this new contract, we expect to provide transparent and fair benchmark prices that closely reflect supply and demand fundamentals in physical rubber market,” he said.

Indian Rubber Growers Association General Secretary Sibi J Monippally said: “The rubber futures are absolutely necessary for price risk management and hedging for all the stakeholders of the rubber trade. Rubber futures will act as a domestic benchmark for price discovery for the Rubber prices.”

MCX said that India is the sixth largest producer and second largest consumer of natural rubber in the world. Owing to its unique qualities, when compared with the elastomers and synthetic rubber, Indian natural rubber is the preferred raw material for related businesses.

Rubber caters to a spectrum of industries such as automobile, aeronautics, electrical and electronics, materials handling, health care, power transmission, etc. Rubber output in India stood at 6.94 lakh tonnes in 2017-18, while the consumption was 11.12 lakh tonnes, it added.

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