The Dubai Multi Commodities Centre (DMCC) is moving into buying and selling Asian cotton, the UAE daily The National reported on Monday.In what it described as "a major shift from its usual role of regulating commodities trading", the DMCC has set up a new trading platform called the Dubai Cotton Centre (DCC), through which DMCC is expected to buy and sell about 200,000 tonnes of Uzbekistan cotton during its first year of operation, the paper reported.
The DCC which will be a fully owned subsidiary of DMCC, is expected to sign contracts with Uzbekistan’s export agency in October, initially allowing the DCC to buy 100,000 tonnes of cotton and sell it to the wider Asian market, the paper quoted Ashok Das, the executive director of soft commodities and commodities trade finance at DMCC as saying.
Uzbekistan is the third-largest producer of cotton after the US and India and has already signed a trade agreement with the DMCC, agreeing to facilitate the trade of 200,000 tonnes of Uzbek cotton through Dubai, Das said.
He added that the DMCC was examining a range of other agricultural commodities, but would test the market with cotton trading went before expanding its portfolio.
According to Mr Das, this is the first time the DMCC would be getting directly involved in the buying and selling of commodities.
The DCC will first focus on procuring cotton from Uzbekistan and then target other countries from the Commonwealth of Independent States.
The DMCC's soft commodities division has already overseen tea trade through Dubai Tea Trade House since 2005 by bringing together buyers and sellers from across South Asia, Africa and other parts of the world.
It also owns 100 percent of both Dubai Diamond Exchange and Dubai Tea Trading Centre and has a majority stake in Dubai Gold and Commodities Exchange.For all the latest market news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
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