Rubber is a perennial crop with an economical life span of 10-20 years. Price fluctuations has got multifaceted effect on the area, production and productivity of the crop. Unexpected and wide fluctuations in prices may discourage farmers from taking up of improved production and plant protection methods which may result in low production and instabilityin farm income. Cuddy Della Valle Instability Index showed that rubber prices were having considerable instability in both domestic and international markets. GARCH (1,1) model was applied to analyse the extend of volatility during the study period (2005-06 to 2011-12) Uniformity in prices and thereby efficiency in marketing system cab be brought about by integration of the markets. Johansens co-integration analysis was used to test the market integration between domestic and international reference markets of rubber and the results revealed that there exists long run equilibrium.