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MCX to launch rubber futures on Monday

MCX, the country’s largest commodity exchange, plans to launch futures trading in rubber contracts from Monday. Initially, four compulsory delivery rubber contracts due to expire in January through April will be available for trading.

While the trading unit will be one tonne, the base value would be Rs per quintal ex-Palakkad, Kerala. The maximum order size would be 50 tonnes. Earlier, the National Multi Commodity Exchange use to trade in rubber contracts. The exchange was later merged with Indian Commodity Exchange which relaunched the contract but had little success.

MCX received market regulator SEBI’s approval to launch futures contract earlier this month. Despite being the sixth largest producer and major consumer of rubber, India lacks a benchmark price discovery mechanism. If MCX succeeds in generating enough liquidity, its prices on the online platform can become a benchmark for the industry, said a trader.

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Kerala accounts for about 80 per cent of rubber produced in India. The massive volatility in the international prices also takes a toll on domestic rubber prices.

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