While the biggest news in cotton for the last few weeks has been the record purchases of cotton by the Chinese government in a move to protect its domestic farmers as reported by Bloomberg, this week attention has turned to the International Cotton Association. According to a brief from Feb. 14, the group is planning to have an industry focus group meet next Monday to discuss proposals for a new world contract.



Bloomberg further stated that "Price volatility since 2008 has spurred 'substantial' contract disputes in the industry and highlighted weaknesses in current trading practices," which will of course will be key areas of concern during the upcoming meeting.

The Financial Times has speculated that the talks may lead to the U.S. no longer being the supreme arbiter of cotton pricing. One of the main points up for discussion will be whether futures prices should be set by the place of origin or in its destination—a point the ICA voted on 8-7, in favor of origin pricing, in a Jan. 28 meeting that has led to Monday's meeting.

Investors should expect the market to be volatile in the coming week ahead of the meeting and possible announcements of a new world contract on futures pricing.