Iranian saffron producers have listed their highly valuable commodity as a derivative future on the Iran Mercantile Exchange, Islamic Republic News Agency (IRNA) reported on May 24.

The idea of selling the lucrative commodity produced in Iran by the kilo on the exchange was long floated and the move followed months of preparation. Several government body approvals were needed before the rare flower stem used as a spice could be upgraded to become a tradable commodity on the exchange. Around 85% of the world’s saffron is produced in Iran and industry figures believe that with this level of production, it is the natural right of Iranian players to devise the basis for global stock exchange trading in saffron and to set the global base price for the product.

According to a press circular released by the Iran Mercantile Exchange, the listings expiration date is set for September 11, with each contract consisting of 100 grams of premium saffron as its underlying asset including a 3% fluctuation cap.

On the first day of trading, 102.7kg of crown saffron transferred hands, with 1,027 contracts signed. The average price per gram on the day was IRR67,800 to IRR70,000, Tasnim News Agency reported. 

The current price for each kilogram of Iranian-produced saffron stands at a minimum of €658 for low-quality saffron and tops out at €1,094 for the highest quality.

According to the Central Organisation of Rural Cooperatives of Iran on May 23, some 68 tonnes of the stem worth IRR3.25 trillion (€65mn) were purchased from farms in the northeastern regions of Iran. The organisation added that so far this year 650,000 tonnes of agricultural products have been transferred through the organisation. 

The organisation noted that the price of saffron is agreed two months in advance.

Last August, it was reported that Iran’s exports of saffron skyrocketed in the first third of the 2017/2018 Persian calendar year (ended July 22) with 58.2 tonnes, worth $78.58mn, reaching markets. New markets reportedly included the US.

Saffron is a spice derived from the “saffron crocus” or Crocus sativus. Its vivid crimson threads are collected and dried, mainly for use as seasoning and colouring agents in food. Traded for over four millennia, it is also used in traditional medicine and as a fabric dye, most famously in making saffron-coloured robes for Buddhist monks.