NMCE Adds Two Additional Delivery Centres In Kerala, India

The National Multi Commodity Exchange of India Ltd, along with its key shareholder, the Central Warehousing Corporation, has announced 2 additional delivery centres in Kerala with a storage capacity of 14,000 tonnes, removing the adversities faced by rubber industry due to lack of storage space.
These warehouses which are located near Ernakulam and Kozhikode, will add the storage capacity of 12,250 tonnes and 1,890 tonnes, respectively.
The total storage space available for rubber in various districts of Kerala so far was 13,000 tonnes, which has now been raised by another 14,140 tonnes, making it a total of 27,140 tonnes in Kerala.
CWC, the key shareholder in NMCE, seized this as an opportunity for the interest of both CWC and NMCE and also as organisations who took steps in urgency to help small and marginal rubber growers, by adding storage space on immediate basis.
“NMCE now can proudly announce that whatever rubber stocks arrive would be adequately accommodated now near Ernakulam and Kozhikode,” Mr B.B. Pattnaik, Managing Director, CWC and Chairman NMCE, said.
It was felt that the small farmers with small quantity in growing belt near Kottayam, Kochi and Kozhikode, could not easily go to a distant CWC warehouse as it becomes very expensive for them.
Hence, hiring of godown in Kochi Complex by CWC was imperative, and in the past also NMCE and CWC had risen to such occasions to accommodate rubber stock, he added.
Mr Kailash Gupta, Executive Vice-Chairman, NMCE, wondered when there was an overall net shortage of rubber for domestic use, how could export be feasible in the free market regime.
It was discovered that due to the lack of adequate space in the warehouses of the corporation in Kochi Complex and the inability to accommodate the temporary pressure of current peak harvest arrivals of rubber in the market, kept the domestic price much lower than the global prices and exports became feasible.
Indian rubber price was lower than the international price by about Rs 25 a kg on January 13. The NMCE price was Rs 217.77 a kg on that day, whereas the Tokyo (TOCOM) price was Rs 242.31, but the fact is that country's annual rubber production is around eight lakh tonnes and annual consumption not less than 950,000 tonnes.
The NMCE's rubber futures contract witnessed roaring volumes of Rs 3.07 billion, Rs 4.1 billion and Rs 4.62 billiom on January 18, 19 and 20, respectively.
“Whatever our exporters may export now due to straight price parity will naturally add to the overall shortage during the off-season and will be very expensive for the industry in substituting that by imports at much higher prices then from other origins. This reality puzzled me, and hence we requested the CWC to add storage space immediately” Mr Gupta said.
(The Hindu Business Line, India, January