NSEL crisis hinders trading of rubber futures

Introduction

NMCE trade affected due to NSEL crunch

Reasons for decline in amount of traded rubber

Correction in rubber price levels

Agenda

The NSEL crunch is affecting a different section of society. There has been a steep fall in the rubber prices over the past few years. This has drastically affected planters in Kerala & trading of rubber futures.

Introduction

National Multi Commodity Exchange (NMCE) is the country's oldest national commodity bourse

NMCE is the yardstick bourse for trading rubber futures

NSEL crisis have severely reduced the number of clients who trade rubber on NMCE

Clients who traded rubber futures on NMCE fell to 529 in the recently expired May contract, from 981 in the May 2014 contract to an additional 1,057 in the May 2013 one

NMCE trade affected due to NSEL crunch

Occurred mainly because of surplus supply imports of rubber

Supply of imports was 359,857 in the fiscal year through January 2015 (production 568,000) against 360,263 tonnes in the whole of FY14 & comfortable carry forward stock

This has caused the average price to fall 23% to Rs 127.45/kg in Kottayam in January 2015 from the average price in FY14

Reasons for decline in amount of traded rubber

The decrease in price levels though may be a reflection of the international market.

The international price was corrected from a peak of over $5000 per tonne in 2011 to around $2,000 at present.

In India too, the price has correspondingly corrected to Rs 127 a kg from Rs 250.

Correction in rubber price levels

Thank you