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Indian Commodity Exchange launches half-carat diamond futures contracts - 27.11.17

The Indian Commodity Exchange (ICEX) in Mumbai has launched half-carat diamond futures contracts, the organization has said in a statement.


The half-carat contracts will expire in February, March and April 2018, and the exchange expects them to attract more industry players, since half-carat diamonds are commonly used in Indian-made jewelry.


ICEX launched world’s first diamond futures contract in August, with the initial contracts being for 1-carat diamonds, and set for expiry in November, December and January 2018, with delivery possible in the production center of Surat. At the time, ICEX said the world's first diamond futures contracts will provide diamond exporters with a hedging tool.


ICEX also has plans to launch 0.3-carat diamond futures contracts.


At the launch in August, the first diamond contract for delivery in November was traded at 3,279 rupees per cent. One cent is equal to one-hundredth of a carat.


The development of Indian diamond futures contracts began toward the end of the 2014, when discussion began with several Indian government ministries about the potential of a new investment assets. It first was necessary to get the diamond notified as a commodity for derivatives trading, But India’s Securities and Exchange Board of India (Sebi) approved the contract extensive consultation.


ICEX polled polished diamond prices for about nine months for the settlement of the contract, in order to establish benchmarks for settlement.


The stones on offer are certified by the International Institute of Diamond Grading & Research (IIDGR), a De Beers Group company, and vaulting services are provided by Malca Amit, one the diamond industry’s two largest security and logistic firms. Until the time of delivery, the trade quantity remains in an electronic account of the trader, and price listed includes delivery and transaction charges.