0552 GMT November 22, 2019
The opening ceremony of pistachio futures contracts was held in the presence of Ali Akbar Mehrfard, deputy minister of agriculture jihad, Shapour Mohammadi, head of the Securities and Exchange Organization (SEO), Mohammadreza Pour-Ebrahimi, a member of Iranian Parliament’s Economic Committee, Hamed Soltaninejad; CEO of the Iran Mercantile Exchange (IME) and a group of senior managers in Iran’s capital market and pistachio market participants.
Soltaninejad hailed the support provided by the Securities and Exchange Organization, the Iranian Parliament, the Ministry of Agriculture Jihad, and the pistachio businessmen for the entry of pistachio into the IME’s market and said development of derivative instruments, introduction and use of diversified financing and trading instruments, and expansion of markets for specified commodities for the purpose of being the price reference and activities to enhance the country's trade with international markets are the most important strategies of IME in the agricultural sector, en.ime.co.ir reported.
Pointing to trading value of 125,000 billion rials for futures contracts on agricultural commodities since the beginning of the Iranian calendar year, he added, "Setting fair price, providing agricultural finance, providing the opportunity of production planning, and the price fluctuation hedging are the IME’s targets in this area and the launch of futures contracts is a major step toward achieving these goals.”
He described the benefits of the futures contract for agriculture market as risk coverage, fair price discovery, liquid transactions, guaranteed transactions through the IME’s clearing house, financial leverage and low transaction costs. In line with that, during the previous Iranian year, futures contracts on saffron and cumin seeds were initiated and today, the pistachio futures are launched.
Soltaninejad, referring to the history of trading pistachio on the IME, said pistachio is selected for these deals because of the comparative advantage of production, standardization, export-oriented feature, continuous demand and mass production. Two years ago, certificates of deposit for 123 tons of pistachio and last year certificates of deposit for 57 tons of pistachio were traded through the IME and in the current year about 25 tons have been traded.
He further referred to the global experience of launching derivative contracts on agricultural products such as cumin seeds in India and stated that there is no futures contract in the world for pistachio, and today the first futures market in the world for pistachio was launched in Iran. The reason for the lack of futures markets for products like pistachio and saffron in the world is Iran’s comparative advantage of producing the two products. Therefore, by launching new trading tools, Iran can become the price reference of the product in the world.
Soltaninejad pointed to the IME’s measures in the current Iranian year (to end on March 19, 2020) on pistachio and said, “Listing the Talaye Sabz Zarand Company in Zarand and Sabz Daneh Kavir Company in Sirjan as well as negotiations with other private companies and cooperatives in Kerman, Rafsanjan, Semnan and Khorasan provinces, and holding training courses are among the most important steps taken by the IME in this regard.”
The CEO of IME pointed to the pistachio futures contract specifications and said that the first futures contract of fandoqi pistachio (grade 30-32) will be launched for delivery in December 2019, which is 100kg per contract. The maximum volume of each order is up to 25 contracts and the daily maximum price volatility is -/+ %5 with respect to the daily settlement price of the previous day.