Kottayam, India – India’s Rubber Board is setting up an e-trading platform for natural rubber (NR) to bring transparency and visibility for buyers and sellers in the market.
To function as an alternate marketing channel to physical transactions, the platform is being established in alignment with the Indian government’s policy to initiate e-trading for all agricultural commodities, the board said 1 July.
The move is in response to the ‘significant changes’ in the rubber market eco-system in recent years which have resulted in the trading of ungraded rubber, low-quality products and a decrease in the number of dealers.
“A market restructuring with lesser number of active dealers carries the threat of cartelisation and exploitation of producers which would keep the growers away from rubber production,” said the board statement.
An electronic trading platform, it added, can offer a “viable alternative” to address such challenges effectively.
The Indian agency has invited electronic trading platform providers to express their interest for operating the e-trade platform as a joint venture project with the Rubber Board.
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 system will offer a venue where buyers and sellers 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.
The platform will also offer a payment gateway for the transfer of money.
It is also proposed to set up personalised trade pages for manufacturers whose rubber procurement is done only through their registered vendors and factories.
The platform will also feature a system for quality certification to cater the demand from the non-tire sector, which currently lacks quality inspection mechanism at the purchase point.
The NR market structure in India comprises rubber dealers, cooperatives, grower forums, processors and rubber product manufacturers.
Up until now, physical transactions have been carried out in the conventional “spot” basis with informal understandings.
The Rubber Board did not give a time-line for the launch of the platform.