COTTON

In accordance with the regulations of Cotton No. 2 traded on Intercontinental Exchange Futures United States (ICE US).

Introduce

Cotton yarn or cotton yarn is the most widely used natural fiber in the garment industry. Soft, even cotton fibers are grown wrapped around the seeds of the cotton plant, a tropical shrub. Vietnam has a developed textile industry and is a relatively large importer of cotton yarn. Cotton contracts can be traded on the ICE US exchange.

Characteristics

Cotton tree (cotton tree) is a tree in the family Mallow, about 1m high, with fibers attached to the seeds. It is the most important fiber plant in tropical countries. Cotton yarn is the main raw material in the textile industry.
Cotton yarn is white, smooth, 12-50 mm long depending on species and variety. In the process of formation and development, if the weather is not favorable, the cotton fibers are short, few and irregular.

Figure 1. Cotton plants ready to harvest

In the garment and processing industries, cotton types are distinguished first by the length of the yarn. The longer the cotton yarn, the higher the quality.
Cotton fiber has a very high water absorption / absorption capacity. Cotton fiber also has good properties such as heat, soft, stretchy, breathable and especially friendly, does not cause allergies to human skin. Cotton fibers tend to get dirty and greasy even though they can be washed.
Cotton fiber is flammable but can be cooked in boiling water, stable to alkalis but not resistant to acids. Although there are many types of artificial cotton on the market, natural cotton still has an irreplaceable position. In addition, cotton is also used as an ingredient in synthetic materials.
Upland cotton, native to Central America, accounts for 90% of world production, and cotton species native to tropical South America, India, and South Africa accounts for the remaining 10%.

Production and trade

In 2019, India was the world's largest cotton producer with about 5.77 million tons with a suitable climate in the northern region of the country. The temperature around 25-35 degrees Celsius is suitable for the growth of cotton in India. The next countries that produce the most cotton are the US, China, and Brazil

Figure 2. Top 10 cotton producing countries (in 2019)

In 2017, the value of cotton trade reached about 13.2 billion USD. In which, the US accounted for about 45% of export value with about 5.88 billion USD. India exports about 1.16 billion USD in value. (Figure 3).

Figure 3. Group of cotton exporting countries

The countries that import cotton are mainly countries with a developed textile industry such as China, Vietnam, and Bangladesh. (Figure 4)

Figure 4. Group of cotton importing countries.

Factors influencing the market

* Weather Events: Climate change around the world, especially in local cultivation regions  can affect supply.
* Report on agriculture, domestic consumption, exports of exporting countries
* Consumption demand in the world
* Related trade and political events bilateral, multilateral