Cotton
Cotton is the world's leading natural fiber, used in textile and apparel manufacturing. Quality is classified by staple length, micronaire, strength, and color grade. US Pima and Egyptian Giza extra-long-staple cottons are the premium grades. ICE Cotton No.2 (New York) is the benchmark contract.
- Middling 1-3/32"
- Strict Middling
- SLM (Strict Low Middling)
- ELS (Pima/Giza)
- FOB
- CIF
- CFR
Cotton, in brief.
- Common origins
- United States
- Brazil
- India
- Australia
- Uzbekistan
- Common destinations
- China
- Bangladesh
- Vietnam
- Turkey
- Indonesia
- Grades and specifications
- Middling 1-3/32"
- Strict Middling
- SLM (Strict Low Middling)
- ELS (Pima/Giza)
- Incoterms
- FOB
- CIF
- CFR
- Unit of measure
- 480 lb Bales
What moves Cotton pricing
Cotton prices off ICE Cotton #2 futures (New York). The A Index (Cotlook A) is the global cash benchmark: average of cheapest five quotes. Drivers include US planted area (the USDA Acreage report), Indian and Pakistani crop conditions, Chinese reserve releases, and synthetic fiber substitution economics (the cotton-polyester ratio). Pakistan's recurring cotton crop crisis since 2022 has reshaped Asian flows.
How Cotton cargoes are priced and settled
Standard cargo is 200-600 bales (each ~218 kg) or container trade in 80-100 bale loads. Pricing is C-contract plus or minus quality differential plus regional basis. ICA and Bremen rules dominate dispute resolution.
Cotton specifications and dispute practice
Specs cover staple length (1-1/8 inch standard, 1-1/4 inch for fine yarn), micronaire (3.5-4.9 premium range), strength, color grade, and trash content. HVI (High Volume Instrument) testing is universal at modern gins. Disputes turn on stickiness (insect honeydew), neps, and short-fiber content: issues that show up in spinning mills and trigger re-classification claims.
Where Cotton comes from and where it goes
Top exporters: US, Brazil (recently overtook US in some years), India (subject to MSP and export rules), Australia, Greece, Türkiye. Top importers: China, Vietnam (textile manufacturing for global brands), Bangladesh, Pakistan, Türkiye, Indonesia. US-China tariff disputes have repeatedly disrupted the US-China cotton flow.
Who trades Cotton?
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Related market pages.
- Wheat (Milling)Milling wheat is a high-protein wheat variety used for bread, pasta, and baked goods. Protein content (typically 11-14%) determines suitability for different flour applications. Black Sea wheat has become the world's most competitive export origin, while US Hard Red Winter and Canadian Western Red Spring are premium grades.
- Wheat (Feed)Feed wheat is a lower-protein wheat grade used in animal nutrition, particularly for poultry and livestock rations. It is typically sourced from the Black Sea region and Europe at a discount to milling wheat. Feed wheat competes with corn as an energy source in feed formulations.
- Corn/MaizeCorn (maize) is the world's most produced cereal grain, used for animal feed, ethanol production, and food ingredients. US Yellow Corn No.2 is the global benchmark. Brazil has emerged as a major second-crop (safrinha) exporter, competing with US and Argentine supplies.
- SoybeansSoybeans are the world's most important oilseed, crushed to produce soybean meal (animal feed) and soybean oil (cooking, biodiesel). Brazil has overtaken the US as the largest exporter. GMO vs. non-GMO origin commands significant price differentials in European and Asian markets.
- Soybean MealSoybean meal is the dominant protein source in global animal feed formulations, containing 44-48% crude protein. It is produced as a co-product of soybean crushing alongside soybean oil. Argentina is the world's largest exporter, benefiting from its differential export tax structure.
- Soybean OilSoybean oil is the second most consumed vegetable oil globally, used in cooking, food processing, and increasingly as biodiesel feedstock. Crude degummed soybean oil is the primary traded form, with refining done at destination. US biofuel mandates have significantly boosted domestic demand.
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