IME Trade Turnover Doubles

The figure registered a 103% growth compared with the first 11 months of the previous fiscal year, IRNA reported, citing data published by IME.  

The trade value is considered a record, as commodities worth 1,690 trillion rials ($6.7 billion) changed hands during the whole of last fiscal year. The figure in the fiscal 2018-19 stood at 1,780 trillion rials ($7 billion). 

As per the IME report, traded commodities and commodity-based financial instruments have grown significantly this year both in terms of value and volume. 

Out of the total trade value, deals worth 2,728.93 trillion rials ($10.9 billion) were done in IME's spot market, accounting for 88% of the total. 

The spot market hosted trading in commodities weighing 30.2 million tons in the said period, indicating a 121% hike in value and a 27% rise in volume compared with the corresponding period of last year. 

Various items, including gold, real estate, mineral, agricultural, petrochemical and petroleum products, are traded in the spot market of the mercantile bourse. 

By Feb. 18, trade in mineral and industrial products grabbed the lion's share reaching 1,440.75 trillion rials ($5.7 billion), up 168% on annualized basis. 

In terms of volume, the traded industrial and mineral products weighed 12.07 million tons, posting a 39% growth in one year.

Derivative Market

In IME's derivative market, 13.12 million derivative contracts worth 186.6 trillion rials ($744 million) changed hands, including 13.09 million futures contracts and 32,492 option contracts. 

The value of traded futures stood at 182.29 trillion rials ($728 million) and option contracts value amounted to 3.31 trillion rials in the 11 month under review.

A futures contract is a legal agreement to buy or sell a particular commodity asset, or security at a predetermined price at a specified time in the future. Futures contracts are standardized for quality and quantity.  

Options are financial instruments that are derivatives based on the value of underlying securities such as stocks. An options contract offers the buyer the opportunity to buy or sell, depending on the type of contract they hold, the underlying asset. Unlike futures, the holder is not required to buy or sell the asset if they choose not to.

In the period, 120.72 million commodity-based certificate of deposits (CD) worth 803.3 trillion rials ($3.2 billion) for different agricultural products were traded at IME. The figure is up 110% and 140% respectively in terms of volume and value. 

The highest trade value was recorded for gold-backed certificate of deposits at 710.52 trillion rials. This was followed by Negin Saffron and Poushal Saffron with a trade turnover of 74.3 trillion rials and 2.16 trillion rials, respectively.  

A commodity CD is a security indicating ownership of the holder on a particular amount of a commodity supported by standard warehouse receipt issued by warehouses certified by the Securities and Exchange Organization, the Iranian capital market regulator.

IME has endeavored in recent years to diversify and expand financing methods for farm products, including creating platforms for trading future contracts for saffron, cumin and pistachio.