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Outline of A STUDY ON THE NATURAL RUBBER MARKET IN INDIA

Outline of A STUDY ON THE NATURAL RUBBER MARKET IN INDIA. by P.M.Mathew Institute of Small Enterprises and Development ISED House, ISED Road, Cochin -682 028 Ph: 0484 2808171, 2809884 Fax : 2809884 E-Mail: ised@md2.vsnl.net.in www.isedonline.org. BASIC FEATURES OF RUBBER MARKET.

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Outline of A STUDY ON THE NATURAL RUBBER MARKET IN INDIA

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  1. Outline ofA STUDY ON THE NATURAL RUBBER MARKET IN INDIA by P.M.Mathew Institute of Small Enterprises and Development ISED House, ISED Road, Cochin -682 028 Ph: 0484 2808171, 2809884 Fax : 2809884 E-Mail: ised@md2.vsnl.net.in www.isedonline.org

  2. BASIC FEATURES OF RUBBER MARKET • A high volatile market • Highly regulated market until recently • High political sensitivity-large number of dealers and growers-decides the economic geography of a State

  3. A Subject of Controversy • Rubber futures is a controversial subject. Dealers, manufacturers and the Rubber Board have distinct positions.

  4. The Problem • To understand and analyse the rubber market, especially derivatives market. The recent changes in the economy demand an understanding of the relationships between spot and futures, price flexibility, and relationships according to the extent of the market .

  5. HYPOTHESIS • It is hypothesized that a futures market for natural rubber helps to reduce violent fluctuations in prices ,and thereby to protect the interests of the majority of the participants in the market

  6. Objectives of the Study • To analyze the circumstances under which futures market was introduced for natural rubber • To analyze the relationship between spot and futures markets. • To analyze the price behavior in the spot and futures markets, with reference to both the domestic and international markets. • To analyze the stake holder response to futures markets, with specific focus on, manufacturers ,traders and the planters. • To study the effectiveness of various regulatory mechanisms, such as the Forward Markets Commission , and the Rubber Board, in relation to commodity futures trading in the country.

  7. Methodology • (a) Reviews and Discussions (b) Analysis of Secondary Data (c) Collection of Field Data, their analysis and interpretation 1. Data from a representative sample of natural rubber dealers. 2. Data from product manufacturers. 3. Case studies of large manufactures, dealers, and Commodity Exchanges

  8. Importance of the Study • The manufacturing industry, which was significantly dominated by the tyre sector, has undergone some diversification, thereby implying possible changes in consumption behavior in the natural rubber market. • While both the regulatory mechanism and the lobbying power of farmers and traders, were against natural rubber imports, in the pre-liberalization era, this situation has changed recently. • The relationship between synthetic substitutes and natural rubber has changed significantly in recent times. • The area under cultivation of natural rubber has grown , both in terms of coverage and quantities.

  9. Scope of the Study • The study is of an all-India nature. However, the field research will be confined to specific areas.

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