Doing trade with the Interexchange Electric Union (IEU) to enhance trade between Iran and other countries, boosting interaction with regional associations including the Economic Corporation Organization, and handling financial transactions with foreign companies is among the Iran Mercantile Exchange’s (IME) top priorities in the coming year, which starts March 21, said the IME head Hossein Panahian.
IEU is an international organization which unites seven commodity exchanges of five countries: Armenia (YERCOMEX), Belarus (BUCE), Kazakhstan (ICEX “Kazakhstan”, CEX “Kaspiy”), Kyrgyzstan (KUCEX), Ukraine (UCEX, “Agrarian Commodity Exchange” Cabinet of Ministers of Ukraine), and two commodity distribution systems from Armenia (Clearing House UCDLE) and Belarus.
The IME has joined the IEU in accordance with its strategic plan, which is aimed at developing mutual ties with commonwealth countries, said Panahian, adding “Based on agreements with the IEU, the IME is expected to start exchanging commodities with the IEU member states in late 2015”.
Speaking in a press conference, Panahian went on to say that the IME, as a major platform to elevate trade between Iran and other countries, is providing infrastructure to create opportunities for both Iranian suppliers and traders to help reinvigorate the economy.
“The government is determined to regulate the market and increase transparency with the aim of helping industries to rebound, which will help stimulate economic growth accordingly,” said Panahian, adding that expanding the derivative market, and diversification of products is key to highlighting IME’s role in the economy”.
Referring to importance of local commodities, specifically agricultural products, Panahian reiterated that implementing Article 33 of the law on ‘enhancing productivity in the agricultural sector’, which stresses guaranteed prices via the mercantile exchange instead of government guaranteed purchase, is high on the agenda of the IME in the upcoming year. Commenting on the importance of the agricultural sector, Panahian stressed that the IME is ready to collaborate with all governmental bodies to help lift trade volume in the sector.
Revising the structure of mercantile exchange and leading companies and institutions’ trade though the IME, and highlighting the IME’s role in the economy, as per the 6th Five-Year Economic Development Plan (2016-2021), are among the IME’s other objectives, said Panahian, adding that “by restructuring single and multiple offerings on both local and export trading floors, the IME’s development will speed up”.
Expanding Derivative Instruments
The IME is planning to expand derivative instruments in the coming year to accelerate the process of funding local suppliers, said Panahian, adding that launching future contracts for commodities like soybean meals, corn, saffron, and rebar is high on the agenda of the IME. Panahian also referred to initiating brokerage-based future contracts, warehouse receipt transactions, and one-day future contracts as other objectives of the IME for the upcoming year.
On the importance of giving traders access to future contracts with short-term maturity, and extending time of trade, Panahian indicated that the IME should expand its derivative market in line with leading exchanges around the globe, adding that “launching option contracts in the upcoming months is IME’s top priority”.
