September 18, 2021

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Industry Ministry determined on massive offering of goods through commodity exchange

Industry Ministry determined on massive offering of goods through commodity exchange – Tehran Times

In a bid to bring transparency of prices to the markets of some major goods, Iran’s government is determined to offer such commodities through the commodity exchange.

Steel is one of those commodities being offered though Iran Mercantile Exchange (IME).

Iranian steel industry, which plays a significant role both in materializing the country’s motto of achieving self-reliance and in boosting the non-oil exports, has been in a development route in recent years.

Reports released by renowned international organizations such as World Steel Association (WSA) show that how the Iranian steel industry has been constantly developing against all the pressures and obstacles created by outside forces like the U.S. sanctions and the coronavirus outbreak that has severely affected the performance of the world’s top producers.

The steel sector is being noticeably developed, and through implementing different projects in recent years a good market has been formed for the steel and steel products, but there is still some controversy over the prices, and some dispute between the upstream and downstream industries in this regard.

Offering the complete steel chain in Iran Mercantile Exchange is said to be the solution to this problem.

It is believed to put an end to all the challenges in terms of price, as this strategy will let the market discover the real price, considering the benefits of upstream and downstream units.

Also as stated by the IME Managing Director Hamed Soltaninejad, the IME lays the ground for transparent competition.

“Transparency should not be just for some sectors of the industry, while the whole industry including the downstream sector should enjoy transparent condition”, according to Soltaninejad.

Cement is the other strategic product to be offered through commodity exchange.

Last week, the secretary of Iran’s Cement Industry Employers Association said that the supply of cement in the commodity exchange ensures the rights of producers and consumers.

Emphasizing the strategy and supportive role of the Ministry of Industry, Mining  and Trade in the entry of cement into the commodity exchange, Abdolreza Sheykhan described the requirement to offer this commodity only in the commodity exchange as a right decision that protects the rights of producers and consumers.

Some experts and also those active in the cement market say that ordinary pricing for cement has always challenged producers, so this product is offered on the commodity exchange.

Gholamreza Shariati, a member of the parliament’s development committee, is one of those supporting this idea.

He says cement is one of the basic commodities that should be offered in the commodity exchange and get rid of government pricing. Market surveillance should replace dictatorial interference in commodity price trends.

Achieving transparency in trades is made possible by the supply of cement on the stock exchange, he believes.

Cars, lands, and houses are the other items to be offered through stock exchange.

Last month, the deputy transport and urban development minister announced that the real estate stock exchange to trade lands and houses will be set up in Iran Mercantile Exchange in the second half of the current Iranian calendar year (September 22, 2021-March 20, 2022).

Mahmoud Mahmoudzadeh, the deputy minister for housing and construction affairs, said that there has been cooperation in this due between the ministry and IME since some months ago and some positive results have been already achieved in this regard.

The establishment of such exchange is in line with the government’s policy of providing housing units for the underprivileged, and many efforts have been already made to prepare the required infrastructure in this due.

The head of Tehran Stock Exchange (TSE) had previously announced that the exchange was due to be established in the middle of the previous Iranian calendar month (early July 2020).

Deputy Head of Iran Chamber of Commerce, Industries, Mines, and Agriculture (ICCIMA) says the establishment of the country’s real estate stock exchange is going to promote transparency in this market.

According to Hossein Selahvarzi, establishing this stock exchange is going to be an opportunity for making the transactions in the housing market more competitive and transparent, and will gain people’s trust for participation in mass construction projects.

And for the vehicles, the offering of cars in the commodity exchange is said to bring transparency in prices, as the price of cars in the free market has become significantly different from the factory price.

While offering the mentioned commodities through the stock exchange has its own supporters and opponents, the deputy industry, mining and trade minister announced on Sunday the ministry’s decision on massive offering of goods via this market.

“Our effort is to provide as much as possible the supply of important and effective products in people’s livelihoods in the commodity exchange, and so far a large part of the products have been offered in this market and the rest should be offered”, Mohammad-Sadeq Mofateh said, adding, different planning and coordination have been conducted in this regard.

He referred to the plan of the Ministry of Industry, Mining and Trade in the 13th government (current government) to cooperate with the commodity exchange and said, “Many times in various market regulation meetings, there has been talk of using the commodity exchange to offer products and discover commodity prices.”

Industry, mining and trade minister believes in using the commodity exchange to regulate the market for various products and the ministry has more emphasis on cooperating with the capital market in the current government than the previous government, the official noted.

The policy of the ministry is that prices in the commodity exchange cannot be set in an orderly manner, he said, adding that the economic actors will have forecasts of a commodity market and prices based on the amount of production and consumption of market participants.

According to Mofateh, the commodity exchange is a platform for the confrontation of supply and demand and the real discovery of price, and the price is not to be presented to the commodity exchange in the form of a notification or a circular.

Commodity exchange is a market in which the prices of commodities are determined only on the basis of supply and demand, he emphasized.

The deputy minister further pointed to the orderly pricing and the consequences of using it in the country’s economy and added, “We have had the experience of mandatory pricing in the country for several years, this measure not only never led to calm in the market, but also increased the problems in the country’s economy.”

It does not seem that there is anyone in the country who agrees with the orderly pricing, but the prices should be determined through the supply and demand mechanism, and the commodity exchange is the only tool for determining the exact and transparent price, the official concluded.



Original News : https://www.tehrantimes.com/news/464996/Industry-Ministry-determined-on-massive-offering-of-goods-through

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