When you hear the words “Cotton Futures” do not automatically think of a bright future for farmers who have suffered for many years due to over-supply of cotton. However, this is not always true. With the current trends and directions, there is a lot that can happen in the cotton industry. With global warming is a hot topic of conversation, more people are starting to pay more attention to the impact that our carbon footprint is having on the world. If we continue to ignore this issue, the effects could be devastating.
Cotton Supply Decline
The supply of cotton has been in decline for years, due to the fact that farmers are unable to grow enough of it to meet consumer demand. There is a major imbalance when it comes to production and demand. As a result, prices have remained stagnant or have gone up but never really fallen to where consumers can afford to pay for them. While we are beginning to see an improvement in this area with the use of genetically modified crops, there are still issues to be addressed.
Higher Cotton pricing
One issue is that the price of cotton has risen faster than corn, which makes it even harder for farmers to make a profit. This is affecting the consumer, as well. With food and commodity prices continuing to rise, many people find that they cannot pay their monthly bills, let alone put food on the table for their family. Unfortunately, the result is increased debt.
Equipment Issues
Another issue that impacts cotton futures is the fact that many farmers do not have the right equipment to harvest cotton. For example, a farmer in India who has access to a modern machine to harvest cotton can sell his crop at a much higher price than a farmer in Kansas or other areas that do not have access to these sophisticated machinery. In most cases, cotton futures will continue to rise because the world will need more cotton to produce clothing and feed to the population. Demand for cotton is increasing and so is the price. It would be a wise idea for consumers to begin buying now through farmers who are experiencing lower prices to get the maximum benefit from this rising demand.
Get in Early
Since there is no limit to the increase in the price of cotton, the smartest thing for an investor to do is get in early. Get in before the prices go up to their historic highs. Investors who get in at the beginning of a rising trend will always receive the highest return. Waiting until after the prices have begun to fall will reduce your potential profit. Waiting is never a good strategy.
With prices expected to continue to rise, it is time to take advantage of the cotton futures market. Cotton futures offers a great opportunity to buy in bulk at a low price while the prices are still low. Take advantage of the low prices and you can turn around your investment quickly and easily.
