Pistachio Derivatives Market Opens Next Week

EghtesadOnline: Iran Mercantile Exchange plans to launch a pistachio futures contract in the coming week, a deputy at the IME said Saturday.

News ID: ۷۴۸۶۲۹

06 October 2019

According to Alireza Nasserpour, the first pistachio futures contract will be launched in the coming week and mature in the ninth calendar month (Nov.22-Dec.21, 2019), the IME official website reported. He did not give the specific date.

In terms of quality and type of the delicacy, only round pistachios (grade 30-32) will be traded.

“One hundred kilogram of pistachios will be traded within each contract and round pistachio with the standard size of 30-32 will be considered as the underlying asset,” Financial Tribune quoted Nasserpour as saying.

Regarding the maturity date, other standard sizes recognized by the IME, namely 28-30, can be delivered if the 30-32 size is not available.

Futures are derivative financial contracts that oblige parties to transact an asset at a predetermined future date and price. The buyer must purchase or the seller must sell the underlying asset at the set price, regardless of the market price on expiry date.

Comparing trade in futures contracts for saffron and pistachio, Nasserpour pointed to the variety of contracts for each grade of saffron.

For pistachio, however, there is only type of contract (grade 30-32) and will not be extended to other grades, he said.

“Round pistachio [aka Fandoghi] is the most widely produced variety in Iran,” he recalled.

US Competition

According to Iran Pistachio Association, Iran and the US account for 85% of the global production of pistachio (dry in-shell).

The two countries have switched places as the world’s biggest pistachio producer over the years. However, statistics show Iran is lagging behind its rival during the last two crop years.

A total of 1,618 tons of pistachio worth $14.68 million were exported from Iran in the first month of the current Iranian year (March 21-April 20), the Islamic Republic of Iran Customs Administration announced.

Germany, Afghanistan, the UAE, Bahrain, Jordan, Canada, China, the Czech Republic, India, Iraq, Kuwait, Kyrgyzstan and Kazakhstan were the main buyers of Iranian pistachio, according to media reports.

The southeastern Kerman Province is Iran’s pistachio production hub.