What is the future of pistachios?
On October 12, 2017, a pistachio shell contract called Ati Pistachio was offered in the Commodity Exchange. In fact, this term stands for Total Futures. These contracts are a good financial tool for exporters as well as pistachio growers. Using this tool, they can cover the risk of pistachio price fluctuations. In this way, pistachio growers are worried about the reduction of their price in the harvest season before harvesting their crop. They can use this contract to determine the price of their product before harvesting. On the other hand, when consumers or exporters are worried about the price increase of this product in the future, they can also use this contract to determine its purchase price in the future.
This contract is completely bilateral and each party to the contract has an obligation to trade a certain amount of pistachios at a set price on a certain date in the future.
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Trading method in pistachio futures contract
Since the exchange of product and money between the parties to the contract will take place in the future, it is not necessary for the parties to the transaction to have the transaction cash or the product ready when they close the contract. In fact, this agreement does not guarantee that the two parties will fulfill their obligations in the future. Therefore, when concluding a contract, by agreement of the parties, they allocate an amount to guarantee the fulfillment of the obligation to the commodity exchange. This amount is called a guarantee. It generally accounts for 20% of the total value of the transaction.
Pistachio futures market contract specifications
Each futures contract has specific characteristics depending on the asset on which the contract is concluded. In fact, these specifications are the most important part of these contracts. These specifications include the unit price and size of the contract, the volume of the order and the future commission of pistachios.