Iran’s saffron-linked funds thrive on ‘red gold’ price surge

A surge in prices for saffron, also called ‘red gold’, have boosted interest in the two Shariah compliant funds within Iran – the first in the global capital market – which invest in saffron futures contracts that were launched by the Iran Mercantile Exchange (IME) since May 2018.

While the lowest spot wholesale prices for saffron hovered about US$600 per kg in 2022 and US$760 in 2023, poor weather conditions that almost halved Iran’s output then saw the same reference prices almost doubling to US$1,240 in 2024.

The price surge has continued into this year and a new IME trading record was charted on the 30^th September 2025 with 3,144 futures contracts for over 314 kg of the highest-classified Negin saffron changing hands at a total IRR334 trillion (US$7.94 million) in value.

Wholesale spot prices for saffron futures on the IME continue to range around the US$2,000 per kg mark in October 2025.

Saharkhiz Saffron Group Investment Fund Portfolio Manager Ahmadreza Kazemi told IFN Investor the recent increase in the Iran currency exchange rate against the US dollar has also prompted some participants to expect higher saffron futures pricing.

“This divergence in expectations among market participants has temporarily boosted the number of high-risk transactions, contributing to the exceptional trading volumes observed in late September 2025.

“As we approach the new harvest season and the issuance of new deposit certificates, traders are anticipating a larger crop than last year, which has led to expectations of a possible decline in certificate prices over the coming months.”

Saffron deposit certificates have a year’s validity and Ahmadreza explained the overall traded volume of these certificates are relatively low compared to physical commodity transactions in key saffron production and trading hubs such as Mashhad.

"Iranian farmers can obtain these saffron deposit certificates (warehouse receipts) by delivering their saffron to one of 12 approved storage facilities in Khorasan. After inspection for quality, weight and type (mainly Negin saffron), a receipt is issued. These receipts can be traded on the IME, making sales secure and transparent."

But he acknowledged the impact of saffron’s upward price trend for this firm’s ETF, which began operating on the 19^th January 2021 at IRR10,000 (US$0.24) per unit and was trading at IRR45,499 (US$1.08) on the 13^th October 2025.

The Nahal Multi-Commodity Fund, which invests in both saffron and silver, was operational from the 30^th January 2021 at IRR10,000 per unit and charted at IRR36,186 (US$0.86) on the 14^th October 2025.

While Iran is widely acknowledged to be the globe’s single largest saffron producer, it is an open secret that much of its produce is repackaged and sold as originating from other countries – due to economic sanctions on Iran.