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The largest commodity exchange in terms of market share, Multi Commodity Exchange of India Limited (MCX), will start trading in rubber futures from 16th August 2018. This new contract is aimed at offering a productive hedging solution to players involved in the rubber value chain including traders, importers, tyre manufacturing companies, growers, exporters and so on. The contracts that are going to end in September, October, November and December this year are going to be available for trading according to an official statement from MCX.
The underlying quality of the contract has been fixed as Ribbed Smoked Sheets 4 (RSS4) with the lot size pegged at 1 metric tonne (MT) with a compulsory delivery option. The price for 100kg is quoted Ex-Kochi, exclusive of all sales/GST.
India is the 6th largest producer and 2nd largest consumer of natural rubber in the world. Natural rubber in this country is a vital commodity that caters to a large number of industries such as aeronautics, healthcare, power transmission and automobiles to name a few. According to the General Secretary, Indian Rubber Growers Association, Mr. Sibi. J. Monipally, the rubber futures are imperative for price risk management and hedging for all stakeholders of the tuber trade. He further added that rubber futures will act as a domestic benchmark for price discovery for rubber prices.
During 2017-18, the production of natural rubber in India was 6.94 lakh MT while its consumption stood at 11.12 Lakh MT, an increase of 6.25 percent compared to the same period previous year. According to the data obtained from the Director General of Commercial Intelligence and Statistics, India imported 4.7 lakh MT of natural rubber during 2017-2018.
