The Indian Commodity Exchange (ICEX) has followed up its earlier launch of 1 carat diamond futures contracts with the launch, yesterday, of a new product for 50 cent diamond futures contracts. The initial 50 cent contracts that are available for trading are for February 2018, March 2018 and April 2018, ICEX said.

The new product, which was launched in Surat in a seminar on diamond derivatives organized by ICEX, will cater to the mid-segment of the diamond industry, and will give Indian diamond manufacturers and other stakeholders who are involved in jewellery manufacturing the facility to directly hedge their price exposure. ICEX said that a a large portion of diamond jewellery such as engagement rings, earrings and bangles are made from 50 cents.

The exchange said that delivery and settlement of these contracts will be in electronic form only and the procedures followed will be similar to those in place for 1 carat diamond future contracts.

Dinesh Nevadia, Gujarat Regional Chairman,GJEPC, who launched the contract in Surat said, “For diamond manufacturers ICEX market is like a boon. It has opened a new front for the industry in terms of investment market. At the same time, it matches the vision of our honorable Prime Minister Narendra Bhai Modi of Make in India pricing where ICEX price is now replacing imported price.”

Surat Diamond Association President Babubhai Gujarati said, “Derivatives in diamond are like insurance for the players to keep them hedged with any price fluctuations to stay firm in the business.”

Sanjit Prasad, MD & CEO ICEX, said “Physical market of half carat diamond is almost three times that of 1 carat diamond in India. Launching of 50 cents contract provides a direct hedging tool to the large number of stakeholders who are having exposure in this category of diamond. ”

ICEX also said that the first expiry of 1 carat diamond was completed successfully with 1,441 clients participating in the process for delivery of 26.27 carats of diamond valued at approximately Rs 83 lakh.