The prices for cotton are as volatile as they can possibly be in a commodity market. To know about these fluctuations at the right time is essential for people dealing with seed cotton.
The National Council of America monthly publishes the current cotton prices.
Between 1995 and 2002, the world price for cotton fell by almost 50%, a trend that plunged many cotton farmers into economic crisis, particularly in Africa. One of the major reasons for this development are the high export subsidies of leading cotton-producing countries such as the United States and China, which have led to dumping of the cotton price. Every year the US Government pays its 25,000 cotton farmers export subsidies to the tune of 4 billion dollars; in China and the EU, subsidies are worth about 1.2 and 0.7 billion dollars respectively.
Despite these considerable market distortions, world prices for cotton have risen again in recent years. Some of the reasons for this are higher costs for fertilizers, pesticides and transport due to increasing oil prices, higher demand for cotton fibre, and frequent crop failures due to climatic irregularities.
Bremen Cotton Exchange, Quotations (CIF prices)
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