The US Commodity Futures Trading Commission is considering a proposal from the Rapaport Group to start the world's first diamond-futures contracts.

The New York-based Rapaport Group fixes prices of diamonds. It wants to start an exchange that will also offer options contracts based on diamond prices.

Rapaport sees the commoditization of diamonds and hence the possibility of introducing Futures, which are contracts for delivery of a security at a specified time in the future at an agreed price.

The prices of diamond have risen by 6 to 7 per cent over the last two years. The price of a top-quality one-carat diamond has risen to $6,632 since the beginning of 2005.

Rapaport Group plans to invite offers sometime in September for top-quality one-carat diamonds. These will be graded by the Gemological Institute of America, an independent evaluator of diamonds.

The group proposes to start an index based on monthly diamond prices.

The index will form the basis for the CFTC-approved futures contracts. Rapaport already provides assessment of diamond spot prices.