The Rubber Board is all set to launch online trading for pure rubber (NR) instead advertising and marketing for the bodily transaction of the commodity.
The board will name for expressions of curiosity (EoIs) soon to finalise partners for establishing an digital platform and trading is predicted to begin in a few months, mentioned KN Raghavan, Executive Director, Rubber Board.
The institution of an digital platform in NR is according to the federal government’s coverage to provoke e-trading for all agricultural commodities, and the brand new idea will herald transparency and extra visibility to consumers and sellers, he informed BusinessLine.
The present NR transactions are carried out on the standard ‘spot’ foundation with casual understandings. The involvement of sellers in rubber commerce has began dwindling from greater than 10,000 in 2000 to 7,135 in 2020. The drop is predicted to proceed, as youthful generations usually are not enticed to the commerce due to declining margins, he added.
Besides, shoppers are additionally involved in regards to the high quality of processed types of NR. Large volumes of ungraded rubber are nonetheless traded out there and its value realisation is commonly low, particularly for high quality grades within the main market. The absence of market consciousness resulted in producers and shoppers shedding alternatives, mentioned Raghavan.
Lack of inspection mechanism
He additionally emphasised the necessity to capitalise on the potential supplied by developments in ICT (data and communication expertise) in commodity trading. Most of the producers within the non-tyre sector would not have a high quality inspection mechanism at buy factors. Generally, the deal relies on belief, which regularly will get scuttled by way of dilution in high quality options.
According to Raghavan, a lot of the phrases of commerce are finished orally with none authorized backup akin to a signed contract or buy orders, which regularly leads to disputes between events.
The Executive Director mentioned the digital platform will likely be designed to complement the prevailing system of dealer-processor-manufacturer based mostly provide chain by encouraging them to take part in e-trade. Grower cooperatives akin to rubber producer societies and small-scale rubber sellers working on the village stage will likely be inspired for higher visibility and value discovery, he mentioned.
Trade facilitation platform
The e-trading platform is envisioned as a commerce facilitation platform the place consumers and sellers can bid for required portions of rubber. The fee gateway additionally will likely be made obtainable for the switch of cash. It can also be proposed to arrange personalised commerce pages for producers whose rubber procurement was finished solely by means of their registered distributors and factories.
The system for high quality certification additionally will likely be instituted as a part of e-trading, which will likely be an added function to cater to the upcoming demand on non-tyre the sector, he added.
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