Forward Markets Commission has permitted national commodity bourse NMCE to launch rubber mini contracts for up to 5 tonnes from next month to increase the participation of small traders.
Currently, the National Multi Commodity Exchange (NMCE) offers futures trading in rubber contracts with a maximum trading unit of 100 tonnes.
"The Exchange shall intimate the Commission soon after the trading in the about said (rubber mini contracts) is commenced," FMC said in a circular.
Once the contracts are commenced, no terms of the contract specifications should be changed without prior approval of the regulator, it said.
As per the contract specification of rubber mini contract, traders can trade a maximum quantity of up to 5 tonne. The delivery centres would be Cochin and Ernakulam.
FMC said that NMCE should take steps to ensure hedgers' participation in rubber mini contracts.
Natural rubber production sector is dominated by marginal and small holdings. Currently, the sector is facing depressed prices and rubber products manufacturing sector is beset with recessionary trends.
India is the second largest producer and fourth largest consumer of natural rubber. It produces and consumes about 0.9 million tonne natural rubber. The synthetic rubber production and consumption in the country is around 1.10 lakh tonnes (LT) and 4.44 LT, respectively.
