allowed only for such products which are not primary goods and which will be
produced only when there is a specific definite demand already established.
The examples include, buildings, bridges, factories, etc. This may include even
such mundane items as tailored clothing. Only the buyers, therefore, will
initiate a Futures contract in this case unlike the conventional Futures which
can be initiated by either buyers or sellers.
Secondly, unlike Salam Sale the payment of price in this case can be
deferred until the delivery of the product. The price, however, can be paid in
installments as may be mutually agreed. Thus in this context it is in line with
the contemporary Futures market where the prices are not paid in advance for
Futures delivery. Despite this feature, this is still not a concept that be
acceptable to or could be accommodated by the contemporary Futures market.
Modern Futures markets are interested only in such items where the prices
fluctuate in short run. In Istisna' commodities, there is little chance for the
traders to earn income in short run on the basis of guesses and speculations as
they currently doing in the Futures market. The nature of any Futures defined
on the basis of Istisna' contracts will be quite different from the present day
Futures. Such Istisna' Futures, if developed, may not strictly come into the
conventional definition of Futures contract. When we are talking of short term
Futures contract, in the structures of contemporary Futures market, where
traders can easily sell and purchase their contract documents and make money
out of the fluctuations of prices, then Istisna' based Futures contract, of course,
will not fall into these types of Futures contracts.
But if we define a Futures contract which envisages a delivery at some
future date, then of course this is as much a Futures contract as is the Futures
contract of the sale of say 1000 bales of cotton. The only problem in case of
such Istisna' contract will be, how do we develop a Futures market for these
contracts and how these contracts can have a secondary market to provide the
liquidity that Futures markets are meant to provide. This is question will be
dealt with later in this section.
Thirdly, this contract is basically a production contract unlike Salam
contract which is basically a trading contract. Thus a seller agreeing to provide
a product in future under this contract will have to be a producer or will
establish a contract-with a producer before entering into such a contract.
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