Speaking to The Financial Express, director general of Automotive Tyre Manufacturer's Association D Ravindran said that until future trading in rubber took off it would be very difficult to predict whether it would be a success or not. "In India, future trading in certain commodities has failed miserably and has not been able to achieve any benefits."

Ravindran disagreed with the Rubber Board's claim that future trading would put a stop to the wild swings in rubber prices and the industry would move towards price stability. "In future trading, deals are made and prices are quoted for transactions which are to take place in a future date. When the actual time of transaction comes, if prices are lower than the quoted pricethe seller stands to gain and if they are higher the buyer stands to gain. I fail to see how prices would become stable due to trading."

However, Ravindran is not prepared to dismiss future trading in rubber as an unviable proposition. "Future trading is an alternate mechanism of trading. A different way of doing things is always welcome."

The Rubber Board's prediction that by 2002 the domestic demand for rubber would surpass domestic production and imports might be resorted to has also failed to make an impression on ATMA. According to Ravindran, the estimates had been made on the basis of past performance of the industry in the controlled era. With changing economic scenario, future estimates based on past records do not hold good, he added.

Citing the example of tyre industry, Ravindran said that growth in the industry was maintained at 8 per cent for a decade till 1996-97 when it suddenly started decelerating. In 1998-99 the industry posted a negative growth of 2 per cent. "In a liberalised economyboth demand and supply conditions become skewed so it is very difficult to predict the future trend."

When the country was integrating with the world economy there was no use of predicting domestic supply or demand, said Ravindran.

"In a few years from now all items would be allowed to be imported freely so there would be no question of a situation demanding import of a commodity," he added. "In such a situation even if domestic supply surpasses demand, buyers would be free to decide whether they want to import or not."