Rubber prices will not be affected by the suspension of futures trade, Rubber Board chairman, Sajan Peter told reporters here on Thursday.
The recent hike in rubber prices was nothing abnormal, but only a reflection of the low availability and high crude prices, he added. He said that the board was not in favour of the ban but had advocated controlling the volatility in futures trade. ?The wide intra-day fluctuations are not conducive to the stakeholders. The board advocates a limit of 2% limit,? he added.
Participation of the stakeholders is very low in the futures market and hence the price discovery is misleading, Sajan Peter said.Futures trading has a limited role to play in rubber as the farmgate realisation is very high (92%) in rubber compared to other commodities. On the rubber stock situation, the board chairman said that supplies are traditionally low during May and June. ?Stocks with small holders are also not much as they don?t have the capacity to hoard, it is only some large stockists? who are holding stocks,? he added.
Several farmers? organisations like the All India Rubber Growers Association expressed their displeasure on the ban and said that it would seriously affect price discovery.
?Several farmers? forums have taken positions on the futures market for their member farmers and they are likely to lose heavily in the ban,? Siby Monippally, general secretary of the association said. Futures trading had brought a fundamental change in the price discovery and made the process more transparent, he said.