Should You Invest In Cotton Future?

A key raw material in the textile and clothing industries, cotton has been in use for thousands of years. Used for a variety of industries, including fabric, paper, coffee filters and more, cotton represents a multibillion- dollar global market. Several countries around the world rely heavily on cotton exports, including China, which is the world’s largest exporter. Since it is a crop, cotton can be impacted by weather conditions, which could affect global supply. In addition, the cotton chart could also be affected by global demand, political issues, innovation in the synthetic fabric industry and more. Technological advancements in growing, picking and processing raw cotton may also impact prices. Cotton is grown all over the world, however, the largest exporter by far is the United States. More than one-third of the world’s cotton supply comes from the US, while India holds second place, accounting for 15% of global exports. Cotton is traded in the form of futures contracts and their derivatives, such as CFDs. With CFDs, traders can trade cotton without actually needing to buy the contract which supplies the cotton. To stay updated on cotton price movements, add it to your watchlist on eToro.