Unusual volatility in natural rubber prices, despite peak production season and record imports, smacked of speculative manipulation in the commodity, the Association of Automotive Tyre Manufacturers? Association (ATMA) said, calling for a suspension of futures trading in rubber.
?As immediate and direct fallout of heavy speculative activity in natural rubber futures trading, the physical market for rubber is being unduly affected,? Raghupati Singhania, chairman, ATMA said in a note sent to commerce and industry minister Anand Sharma and agriculture minister, Sharad Pawar.
Natural rubber prices have escalated sharply since the onset of peak rubber tapping season in October. Rubber prices, in the spot market which ruled at Rs 109 per Kg on November 1, 2009, are now hovering around Rs 140 per kg.
In the letter Singhania has argued that despite normal conditions, rubber supplies in the market are being deliberately restricted at the behest of some vested interests.
He cautioned that, ?such speculative activity is likely to result in far reaching consequences for all genuine stakeholders including rubber growers, dealers as well as consumers.? ATMA?s contention is that till normalcy returns to the market, rubber futures trading should be suspended. Earlier too, FMC had suspended futures trading in rubber from May 2008 to November 2008 to curb price volatility. In December 2008, natural rubber prices normalised and futures trading were restarted.