IME Launches Pistachio Trade

Pistachio trade kicked off at Iran Mercantile Exchange for the first time on Monday in a ceremony attended by IME chief, Hamed Soltani-Nejad, and Economy Minister Ali Tayyebnia.

IME’s agricultural trading board saw the offering of 30 tons of pistachio by Fath va Nasr Company as well as Sirjan and Rafsanjan’s pistachio producers cooperatives.

“The advent of pistachio trade at IME marks a new relationship between the capital market and the agricultural sector,” Tayyebnia was quoted as saying by IRNA.

IME first announced its intention to list pistachios for trade at the commodities exchange a month ago, when Soltani-Nejad said, “IME intends to create an integrated [pistachio] market capable of influencing global prices.”

Iran is a major producer of pistachio in the world.

According to Mojtaba Khosrotaj, the head of Iran Trade Promotion Organization, Iran supplies more than 50% of the world pistachio market.

“The world pistachio market is worth over $2 billion and our exports amounted to $1.2 billion last year (March 2015-16). In the nine months to December 20, we exported over $800 million worth of the product and expect to repeat last year’s figure by the yearend,” he told Financial Tribune on the sidelines of the Fourth International Exhibition of Nuts, Dried Fruits and Related Industries held in Tehran in January.

Last month, IME started listing saffron for trading using commodity-linked certificates of deposit in Khorasan Razavi Province. The first saffron trade transaction took place in Mashhad Mercantile Exchange in a special ceremony on February 12.

“More than 160,000 families engaged in saffron farming in the province are suffering because of the commodity’s price fluctuations and lack of transparency in pricing mechanisms. Saffron trade on IME is aimed at stabilizing the market, cutting out the middlemen and fixing the farmers’ liquidity issues,” said Amir Masoud Pejmanpour, the Central Union of Rural Agricultural Cooperatives of Iran’s provincial representative, at the ceremony.

According to Soltani-Nejad, plans are underway for saffron trade to take place on the spot market using cash, credit and Salaf contracts.

Commodity certificates of deposits securitize a company’s product inventory and offer buyers easy ownership of goods without the usual hassles of storage and insurance.  

“Farmers transfer their goods to IME’s certified warehouses, receive certificates of deposit based on the stored volume, visit a broker and get their saffron up on the list,” he said.

Warehouse keepers receive 150,000 rials ($4) for each kilogram of saffron from farmers to store the goods and also test up to 3 grams of the commodity to determine its purity and quality. It takes 24 hours to assess the goods and issue a certificate.

Saffron CCD trade will take place every day from 9 a.m. to 15:30 p.m. Tehran time, with the exception of Thursday and Friday.

The seller will receive the money in two workdays, after deducting storage costs and broker fee.

The IME also started listing wheat for exports for the first time on December 28.

IME is a commodities exchange located in Tehran, Iran. Founded in 2006, IME trades in agricultural, industrial and petrochemical products in the spot and futures markets.