Rendezvous: Arun Sekhsaria, MD, DD Cotton

Company Performance

Rendezvous: Arun Sekhsaria, MD, DD Cotton

Textile Excellence had a discussion with Arun Sekhsaria, Managing Director, DD Cotton Pvt Ltd., on the occasion of launch of Cotton Future Trading at MCX. Arun has been a prime mover of this initiative at MCX and shared his views on subject. here is the brief.

How did the MCX entry come about?

Cotton is not protected or hedged. Only the cotton growing farmer has a support system through government sponsored MSP operations. As we all know, last year the cotton market was volatile. The entire value chain was affected. Whoever had permission from RBI were hedging at New York Futures. About a year back, while sitting with Jignesh Shah of MCX, I suggested to him why not start with cotton futures. I realized that Jignesh was passionate about cotton. He agreed. We met with a cross section of the stake holders across the country. After a series of meetings, we constituted the National Advisory Committee for Futures and through this forum formalized the cotton futures contract. We got FMC’s approval in June. Thereafter we conducted roadshows in Ludhiana, Aurangabad, Coimbatore, now Mumbai and next is Ahmedabad.

Who all are the National Advisory Committee (NAC) members?

Badhresh Mehta, myself, Dhunia of Vardhaman, Anil Nayar of Alok Industries, B K Patodia of GTN Textiles, Ramaswami of Loyal Textile, Vinod of Arvind Group, two large ginners - Rajaram Industries from Kadi and Manjit Cotton from Aurangabad to name a few of them. We also have Chirag Shah of M P Global, a walking encyclopedia on futures. We also have four regional committees for North, Gujarat, Maharashtra and South.

How different will MCX futures be from its contemporaries? Will it be successful?

It is all about timing. The past attempts were not based on right timing. Why change a system when things are running fine? However, the timing of MCX’s entry is perfect considering the volatile market conditions. MCX is India’s largest player and amongst the top 10 in the world. They have the depth and network. MCX futures will bring the focus of the global cotton economy on India and that too on real time basis. Also the NAC has a wide representation from the industry, thereby lending credibility to this exercise. MCX offers liquidity. That is the success of any futures contract. MCX cotton will be the benchmark in time to come. Even garmenters will benefit from it. Thus, I am very bullish. My only message to the industry is to leverage this exchange for hedging and not speculating.