India may be eyeing to become the largest producer and exporter of cotton in the world, but it fails to attract higher prices for the commodity in the international market because it lacks a quality benchmark or certification.
As part of its efforts to brand Indian cotton by creating a quality benchmark, The National Commodity and Derivatives Exchange (NCDEX), a leading comex in the country, has come out with a novel concept called Gold Circle.
Gold Circle will be an elite group of Indian ginners, who will undertake stringent checks and balances in ginning and sorting of cotton. The parameters will be set by NCDEX and the exchange will also certify the cotton.
In the present scenario, Indian cotton is bought on the basis of prices and not on quality. “We need to brand Indian cotton so that the premium prices could be fetched for it,” said R Ramaseshan, managing director, NCDEX.
Unlike the US, cotton in India is neither branded nor certified by a government agency or any other entity. US Department of Agriculture (USDA) certifies the entire cotton produced in the US. The certified cotton fetches premium prices in the international markets.
The parameters set by USDA are also recognised by rest of the countries importing US cotton. The Gold Circle is aimed at creating that quality benchmark.
