Sources said that IIPM had submitted its final report to the board recommending that futures trading be introduced as early as possible.

According to the report, the country should opt for futures trading so that it could gain an `early bird advantage' compared to countries like Indonesia and Thailand.

Analysing the post-WTO market situation, the IIPM report said that the current market intervention methods would become irrelevant with the withdrawal of quantitative restrictions (QRs) by April next year. "The removal of QRs and a reduction in import duty makes it imperative that we adopt new instruments to stabilise prices," the report said. The present strategy of price stabilisation by stock regulation will not be relevant in an era of free imports, it observed. The introduction of futures trading will also pave the way for the removal of the current practice of buffer stocking of natural rubber needed for two months' consumption. At present, rubber futures trading takes place only in Singapore. Although the Malaysian capital of Kuala Lumpur earlier had futures trading, it was discontinued some time ago. The report has called for setting up the exchange with the involvement of rubber dealers, rubber merchants, rubber growers and the industry, thereby making it clear that the exchange should not become anappendage of the board. The report has also called for futures trading in latex rubber. If the board and other players approve of this recomendation, it will be the for the first time. Latex futures can be made available anywhere in the world.

Sources in the rubber board acknowledged the receipt of the report but declined to make any comment on it. "We received the report a few days ago and are examining the report. It is too early to make any comment," sources added. A major headache for the board and other players in the venture will be to decide on whether to establish a stand-alone rubber futures exchange or to align themselves with an already existing commodity exchange. Kerala, which accounts for more than 90 per cent of natural rubber production in the country, already has a well-developed pepper futures exchange.

The promoters of the exchange, Indian Spice and Pepper Traders Association (IPTSA), has been keen on adding other commodities to its kitty. The First Commodity Clearing Corporation of India, the clearing arm of the International Pepper Futures Exchange, is also keen on establishing futures in various commodities.

Promoters of natural rubber futures will be in a position to cut their cost considerably by joining hands with the existing exchange as they would be in a position to take advantage of the infrastructure. The Indian Institute of Plantation Management has also recommended futures trading in tea. The report submitted by IIPM is now under the consideration of the Tea Board.

The board has already conducted a series of roadshows in the tea growing areas of the country to get a feedback from the growers and industry.