Cotton - Commodities

Introduction

The cotton industry is mainly concentrated in seven countries: China, US, India, Pakistan, Uzbekistan, Turkey and Brazil, which account for approximately 80% of world cotton production. Because it is a commodity with high production costs, countries who employ a higher technological level in the production of cotton fibers can influence the price of cotton.

Despite being the world's largest producer, China does not export its cotton production. The United States controls about 40% of the world's cotton market. This performance is driven by a number of subsidies provided by the US government to local producers, such as productivity warranty.

Characteristics

Cotton is a white or off-white fiber obtained from fruits of some species of the genus Gossypium, Malvaceae family. There are many native species of tropical areas of Africa, Asia and America, and from the end of the last ice ages tissues were already made with cotton. Currently, only 4 species are exploited on a large scale for the manufacture of medical instruments and tissues. The cotton plant is a subtropical plant common in Mexico, Australia and Africa.

History

Cotton has been used for at least 7000 years. Evidence of cotton us was found in Mehrgarh where the first Cotton yarns were preserved in copper beads. The cultivation of cotton became more widespread during the Indus Valley Civilization, which covered parts of modern eastern and northwestern Pakistan from India. The cotton industry was well developed and some methods used in cotton spinning and manufacturing continued to be used until the industrialization of India.

Utilities

Cotton is used to make a number of textiles. These include bath towels and robes; denim for blue jeans; socks, underwear, and most shirts. Sheets are often made of cotton. Cotton is also used to make the yarns used in knitting and crochet. Fabrics can also be made from recycled or reprocessed cotton that would otherwise be discarded during spinning, weaving or cutting process.

While many fabrics are made entirely of cotton, some materials blend cotton with other fibers, including rayon and synthetic fibers such as polyester. It can be used either knitted or woven fabrics, since it can be mixed with elastin to make a more elastic thread for knitted fabrics, and garments such as trousers.

Markets

futures and cotton contracts are traded primarily on the Commodities and Futures Exchange (BM & FBOVESPA) and the New York Mercantile Exchange (ICE).