PMEX Introduces New Products

The Exchange endeavors to offer products that cater to the needs of all types of market participants such as investors who invest in commodities for long term, traders who work with the aim of earning profit based on their market strategy and hedgers who trade to mitigate their risk, using commodity futures market.

Against this backdrop, PMEX is relentlessly striving to broaden its product range by launching a rich mix of products to further enhance its product portfolio. This will not only help the brokers to attract new business but also provide portfolio diversification opportunities to market participants.

In the fourth quarter of 2016, PMEX launched cash settled futures contracts of Copper & Brent Crude Oil and deliverable contracts of Paddy Super Basmati Rice.

  1. Copper Futures Contract

On October 25, 2016, PMEX launched Copper Futures Contract duly approved by the Securities and Exchange Commission of Pakistan (SECP). PMEX Copper Futures Contract is a cash settled contract. Trading unit of the contract is 1,000 pounds and the price quotation is in USD but margins are paid in PKR. The contract was made available for trading from Wednesday, October 26, 2016.

Copper ranks as the third-most-consumed industrial metal in the world, after iron and aluminum. Presently, in Pakistan, copper is used in industrial manufacturing, cable, electronic and home appliances. Its consumption centers are located in Karachi, Lahore, Gujrat, Gujranwala, Rawalpindi, Islamabad, Peshawar, Kasur and Kotri. Pakistan is deficient in indigenous production of copper, therefore bulk of the requirement has to be met through import exposing the consumers to price volatility risk. Introduction of Copper Futures Contract will provide hedging opportunities to all such consumers against the price volatility risk in a convenient manner.

PMEX Copper Futures Contracts Specifications
Trading Hours05:00 am to 02:00 am PST
Trading DayMonday to Friday
Unit of Trading1,000 Pounds
Trading SystemPMEX ETS
Price QuotationUS $ per pound up to four decimal places
Tick size / Minimum Fluctuation$0.0001 per pound
Tick Value$ 0.1
  1. Brent Crude Oil Futures Contracts

On December 18, 2016, PMEX launched Brent Crude Oil Futures Contracts, duly approved by the Securities and Exchange Commission of Pakistan (SECP). These contracts are cash settled with trading units of 10 and 100 barrels and the price quotation is in USD but margins are paid in PKR. The above mentioned contracts have been made available for trading from December 19, 2016.

Crude oil is one of the most significant sources of energy in the world and is therefore critical for global economic growth. In Pakistan, crude oil is a key component of the economy where transportation and power industries are the major consumers. The country is deficient in indigenous production of crude oil, therefore bulk of the requirement is met through import of large quantity every year thus exposing the importers to price volatility risk.

The Exchange is confident that with the introduction of this contract in its energy product mix, market participants can now trade in both Brent and WTI benchmarks of crude oil. The new product will provide an excellent opportunity for market participants such as refineries, oil marketing companies, airlines, etc. to hedge their price risk.

PMEX Brent Crude Oil Futures Contracts Specifications
10 Barrel100 Barrel
Trading Hours05:00 am to 02:00 am PST
Trading DayMonday to Friday
Unit of Trading 10 barrels100 barrels
Trading SystemPMEX ETS
Price QuotationUS dollars per barrel, up to two decimal places.
Tick size / Minimum Fluctuation$ 0.01 per barrel
Tick Value$ 0.1$ 1
  1. Super Basmati Paddy Rice Weekly Futures Contracts

In line with PMEX’s objective of replicating the successful model of red chilli trade for other agricultural commodities to connect the Exchange with the real economy, PMEX listed Super Basmati Paddy Rice Weekly Futures Contracts. This is the second listing of agricultural produce after red chilli, on PMEX’s state-of-the-art trading platform. The Exchange collaborated with the value chain partners of red chilli, SGS for quality certification and Pakistan Agriculture Coalition (PAC) sfor trade facilitation.

Pakistan produces one of the best varieties and grades of long, slender-grained rice, known as Basmati, which enjoys enormous domestic and international demand due to its unique aroma, nutty flavor and best nutrition value.

Following contracts of different varieties were made available for trading from December 02, 2016.

  1. PMEX Super Basmati Paddy Rice (Grade A-1) Weekly Futures  Contract
  2. PMEX Super Basmati Paddy Rice (Grade A-2) Weekly Futures  Contract
  3. PMEX Super Basmati Paddy Rice (Grade A-3) Weekly Futures  Contract
  4. PMEX Super Basmati Paddy Rice (Grade A-4) Weekly Futures  Contract
Quality Specifications
SpecsGrades of PMEX Super Basmati Paddy Rice Futures Contracts
Trading DayTrading DayTrading DayTrading Day
VarietySuper Basmati
TypeExtra Long
ColourPale Yellow
Moisture17% MAX19% MAX21% MAX23% MAX
Contrasting Varieties4% MAX5% MAX
Green Grains5% MAX6% MAX7% MAX
Red Rice1% MAX
Heat Damage0.5% MAX
Field Damage1% MAX
Brokem Grain1.5% MAX
Shriveled Grain5% MAX
Cracks5% MAX
Dirt/Trash/Inert4% MAX

Posted on March 27, 2017 in PMEX

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