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Our Offering
• Memberships: We are a member of ICE Futures U.S. with clearing arrangements with three major clearing brokers on the exchange.
• Knowledge and Expertise: Our cotton experts combine the essential industry and product knowledge with a wealth of market experience and are able to support and service all your trading transactions and requirements.
• Online Trading: Our STAR trading platform is designed exclusively for professional traders. It offers electronic futures and options trading on a variety of markets.
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Cotton Trading Today
Cotton is a highly important commodity worldwide. The total global trade reaches $12 billion, with the largest exporters being the United States and Africa.
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Futures Trading
ICE Futures U.S. Cotton No. 2sm Futures
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Background to the Cotton Market
History and Origins
The significance of cotton as one of the most widely used commodities remains indisputable. According to archaeological evidence, people have being using cotton for more than 7,000 years. In modern times, cotton cultivation is believed to have officially begun in India during the first decades of the 15th century, being extended to most of the warmer regions in Asia and America by the end of the century. However, despite the quick expansion of cotton production in the tropical and subtropical regions of Asia and America, India remained the leading country in cotton cultivation for many years.
India’s contribution in cotton production however, declined during the British expansion in India due to the obligation of the country to supply only raw materials while purchasing manufactured textiles from Britain. This development together with the advent of the Industrial Revolution in Britain led to a great boost in cotton manufacture, as textiles became Britain’s leading export.
By the middle of the 17th Century, India was unable to provide Britain with the vast quantities of cotton fibres essential for the British cotton manufacturing. Cheaper American raw cotton made its appearance to cover this gap, with British traders purchasing cotton from plantations in the U.S. and the Caribbean. This leading role of the U.S. in cotton production, declined during the Civil War giving the opportunity to the British Empire, including India, to re-establish its cotton production. By the end of the Civil War in 1865 however, America gained back its leadership in cotton production and today cotton remains a major export of the Southern United States.
Production
Growing in tropical and subtropical regions such as the Americas, India and Africa, cotton is a soft, stable fibre around the seeds of the cotton plant. For the production of the natural-fibre cloth used in cloth making, the fibre is spun into yarn or thread. The soft, breathable textile which is created is used for the production of various textile products such as terrycloth, towels, robes and jeans. Socks, underwear and T-shirts are also made from cotton.
Given its origins, cotton can be successfully cultivated only through a long frost-free period, with plenty of sunshine and a moderate rainfall. These conditions are usually met within the tropics and subtropics in the Nothern and Southern hemispheres. However, nowadays many countries grow cotton based on technical water supplies. South Plains, an area of the United States, is the largest cotton cultivation region in the world.
The main producers of cotton in the world are:
• China
• India
• United States
• Pakistan
• Brazil
• Uzbekistan
• Turkey
• Greece
• Turkmenistan
• Syria
The leading exporters are:
• United States
• Uzbekistan
• India
• Brazil
Consumption
Since the 1940s, world cotton consumption has been steadily increasing at an average rate of 2% per year. Developing countries are mainly responsible for this increase in cotton demand, absorbing much of the global cotton supplies. Characteristically, between 1981 and 1998, developing countries accounted for 77% of the global cotton consumption and since 1999 their ration has been above 80%. A significant amount of the cotton manufactured is also consumed by the main economies that produce it. China, the United States, India and Pakistan, account for approximately 56% of the global world consumption. Cotton consumption is expected to continue increasing by 2% per annum.
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