What does Grading Certificate mean?
A formal document setting forth the quality of a commodity as determined by authorized inspectors or graders. In futures contracts, quality grades are mentioned and grading certificate assures quality consistent with the agreement.
Futures Knowledge Explains Grading Certificate
Various qualities of a commodity are available in the market. Standard Grades specifying quality of commodities are fixed by the commodity exchanges. The grade is specified in the futures contract which is agreed upon by both parties to the futures contract. As these grades are to be met while making delivery of the commodities, grading certification based on inspection is issued by authorized approving authority. This gives comfort to both seller and buyer and avoids any future dispute.