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Dubai Cotton Center to start operations in April
11
Apr '09
After a three-month delay due to economic uncertainty, the Dubai Cotton Center (DCC) is planning to start operations during the third week of April. DCC will be a redistributions and trading post for cotton from Uzbekistan on the way to Asia. It would be helpful, since it will save shipping time up to 40 days, since the cotton will be stored in Dubai.

Currently, for Asian importers, Uzbek cotton is transported via rail to the Iranian port of Bander Abbas from where the consignments to Asia are often subject to delays. It will take just seven to ten days to ship the cotton to the majority of Asian countries if cotton is stored in Dubai.

Cotton to be traded at DCC will be brought directly through shipping vessels from Bander Abbas to Dubai for storage. Trading arm DCC is a fully owned subsidiary of the Dubai Multi Commodities (DMCC). This trading arm has made an import deal with Uzprommashimpeks (UPM) to supply cotton to DCC. UPM is one of the largest cotton exporters in Uzbekistan.

Decrease in the global cotton demand due to economic crises has lowered down the expectations of the volume of trade DCC it expected to do at the new center. For the season ending in September, the DCC has cut its trading target by 25-30 percent to 50,000-60,000 metric tons.

According to the officials of DCC, the numbers would be revised in case of further decrease in cotton demands. Due to economic crises, general cotton trading is experiencing uncertainty as demands for textiles decreased with disposable or non-refundable income.

In coming days DCC will be selling cotton at around 50 cents per pound which is considered a benchmark price, but, DCC will increase the prices to improve margins as soon as cotton demand improves. DMCC is in talks with World's largest marine terminal operators, DP World with regards to creating storage facility for cotton. They may also start future contracts for cotton.

Fibre2fashion News Desk - India

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