Rubber trading comes to a standstill

By George Jacob

KOTTAYAM, SEPT. 22. With traders, manufacturers and a section of the authorities at the Rubber Board apparently engaged in a game of hide and seek, trading in natural rubber (NR) which resumed in a nominal way on Friday, reverted to a standstill on Saturday. Ever since the declaration of a minimum price for NR nearly ten days back, the major players in the internal market have been holding the grower to ransom by keeping away from the market mainly on the issue of the so-called `ungraded' variety.

The `ungraded' variety, an ambiguous collection of apparently lower quality NR, which was one of the crucial elements in rubber trading for the dealers, had made an unexpected exit from the scene with the declaration of the minimum price. Dealers, claiming that they would not be able to engage in trade since there was no provision for all grades of rubber in the Government order, had kept away from the market for nearly a week.

However, on Thursday, the traders came up with the claim that they had received tacit approval of the authorities concerned to trade in the `ungraded' variety, accounting them under `milling grade' or `off grade'. Armed with this alleged approval, the traders engaged in trading on Friday, mostly in `off grade' variety.

However, with the information in this regard leaking out, the Rubber Board washed its hands off the controversy by issuing a pressnote, making it clear that those engaging in trade below the stipulated rates (of Rs. 32.09 for RSS-4 grade and Rs. 30.79 for RSS-5 grade) would have to face legal action. With this, the traders again relapsed into inaction on Saturday. Later in the day, speaking to mediapersons, they claimed that it would not be possible for them to continue business under the present situation.

In spite of the lack of clarity and the inopportune timing of the declaration of minimum price, many believe that it is the highly unprofessional manner in which the dealers, at least a section of the big suppliers, were trying to make a killing out of the prevailing confusion which has led to the present impasse. According to market-watchers, the tyre manufacturers, who have been keeping away to see the final outcome of the

battle will be forced to enter the market without much delay as their stocks are depleting fast. A few days' patience on the part of the dealers would have helped the market to stabilise at a higher level, keeping the internal market equilibrium on a healthy note.

However, it is alleged that some of the traders want to make quick money and they are putting pressure on all concerned on the issue of the ungraded variety. If trading was allowed, they would have been able to buy as much NR as possible under the `off grade' variety, only to sell it at a much higher price of RSS-4 or RSS-5 varieties, when the tyre manufacturers entered the market.

It is believed that the attempts by a section of the traders in this regard have created a rift among them and now efforts are on to resolve the problem. An interesting feature in the past one week was the total absence of political leaders, so-called ``champions of rubber growers'' on the scene.

Adding all these up, the present dilemma in the NR market points to the predicament the poor small grower faces, in spite of all the clamour being made in his name by the Rubber Board, politicians, dealers and the manufacturers.

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Section  : Southern States
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