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Rubber futures to figure in Bangkok summit

May 08, 2007 19:20 IST

Fears of the Indian rubber market over Futures trading well prominently figure in the World Rubber Summit to be held in Bangkok from May 14 to 18.

According to rubber board officials, a session on futures trade in rubber at the summit is expected to provide important pointers for policy in the Indian context on futures trade.

The meet is taking up the topic of futures trade in rubber for discussion as per the request of rubber board chairman Sajen Peter. As the chairman of the economic committee of the rubber study group, Peter had requested the International Rubber Study Group to study the issue.

The board chief had also said that the Rubber Board's view on Futures trade in rubber would be finalised after IRSG studied the issue.

There were serious allegations of manipulation in rubber Futures in the recent past. The fears were fueled by an unexpected price rise during the peak production season of December 2006 and January 2007.

Following

this, organisations like Automotive Tyre Manufacturers Association asked for a ban on Futures trade in natural rubber.

When the prices skyrocketed, the board had taken the view that the stakeholders in the sector should be given more participation and said that the Rubber Act necessitates a licence for dealing in natural rubber.

When the issue was taken up for further discussion, Sajen Peter had maintained that a final view would emerge only after the IRSG study. The Rubber Board chief would be attending the 4-day summit. IRSG would take up the topic "Futures market and natural rubber prices" for discussion in its fifth session.

Three important aspects that would be covered are: "Futures role in manipulating spot market price", "Speculative flows - the impact of managed money on natural rubber price formation" and "Natural rubber development from a trader's perspective".

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