The centre will be a redistribution and trading post for cotton from Uzbekistan en route to Asia. Storing large quantities of cotton in Dubai will help save up to 40 days of shipping time for Asian importers, Ashok Das, head of commodities at DCC, said on Monday.
At present, Uzbek cotton for the same buyers is transported via rail to the Iranian port of Bandar Abbas. Shipments from there to Asia are often subject to delays, Das said.
"Ships from Bandar Abbas are not very regular but once the cotton is stored in Dubai it will take seven to ten days to ship the cotton to the majority of Asian countries," Das said.
Cotton to be traded at the DCC will be shipped directly from Bandar Abbas to Dubai for storage, Das said.Last year the DCC, a trading arm and a fully owned subsidiary of the Dubai Multi Commodities Centre (DMCC), clinched an import deal with Uzprommashimpeks (UPM) to supply the DCC. UPM is one of the largest cotton exporters in Uzbekistan, which is the world's third-largest cotton exporter.
The economic crisis has dampened global cotton demand, leading the DCC to lower its expectations for the volume of trade it wants to see at the new centre.
The DCC has cut its trading target 25 to 30 per cent to 50,000-60,000 metric tonnes for the season ending in September, Das said.
