PR / IH Desk
KOTTAYAM, July 01 2020: Rubber Board is setting up an e-trading platform for natural rubber (NR) with the objective of bringing in transparency and establishing more visibility to buyers and sellers in NR market. This would also function as an alternate marketing channel for physical transactions in NR. Expressions of Interest (EOI) have been invited from electronic trading platform providers for operating an e-trade platform for NR as a joint venture project with Rubber Board. The EOI document seeking details of e-trade platform providers can be downloaded from the website www.rubberboard.org.in and Central Public Procurement Portal.
The electronic platform is contemplated to complement the existing system of dealer-processor- manufacturer based supply chain by encouraging them to participate in electronic trading. This is also in line with the government’s policy to initiate e-trading for all agricultural commodities. Grower collectives such as Rubber Producers societies (RPS), cooperatives, Rubber Board sponsored companies and small scale rubber dealers who are operating at village level also will be encouraged to participate in the platform for better visibility and price discovery.
The e trade platform is envisaged as a trade facilitation platform where buyer and seller can bid for required quantity of rubber. The trade will close after price matching and digitally signed contracts will be generated and shared among both parties as email narrating the contract specifications. Provision for payment gateway will be available for transfer of money. It is also proposed to set up personalized trade pages for manufacturers whose rubber procurement is done only through their registered vendors and factories. System for quality certification also will be instituted as part of the e trade, which is an added feature to cater the impending demand of non-tyre sector.
The NR market structure in India comprises rubber dealers, cooperatives, grower forums, processors and rubber product manufacturers. Physical transactions in NR have been carried out in the conventional “spot” basis with informal understandings. Rubber market eco-system has been changed significantly over years with changing patterns of demand in terms of quality and quantity from consuming sector. Though price realization is relatively good for producers of quality rubber, large volumes of ungraded rubber are traded in the country. Further, producers also tend to suffer due to lack of proper market awareness, which often dissuades them from producing quality material. The size of the dealer fraternity has shrunk considerably from 10512 in 2000 to 7135 at present. The fall in count of active dealers is expected to continue in the coming years also as younger generations are staying away from this trade due to the prevailing thin margins.
A market restructuring with lesser number of active dealers carries the threat of cartelization and exploitation of producers which would keep the growers away from rubber production. Electronic trading platform offers a viable alternative which can surmount these challenges effectively.
Rubber manufacturing industry, especially the non-tyre sector, also faces problems with regard to availability of good quality rubber. Most of the manufacturers in non-tyre sector do not have quality inspection mechanism at the purchase point. Further, the transactions are based on trust and dilution of quality, if it happens, can create huge difficulties.
Hence a mechanism for assuring quality of natural rubber traded, while proving transparency and objectivity in determination of price would be a boon for both NR producing as well as consuming community. Rubber Board has come out with the concept of having the electronic trading platform for NR, taking into account all these factors.