Cameroonian cotton no longer to be subjected to American market dictatorship

As of the 4th quarter of 2014, the Intercontinental Exchange (ICE) will launch its new cotton contract. This was the news stated on May 1, 2014 by ICE Futures US president, Ben Jackson. According to experts, this is not only “a major page being turned in cotton trading” globally, but also “a huge step forward for African cotton producers,” including those in Cameroon.

With the new contract to take effect in the fourth quarter of 2014, the respective realities in Africa (Cameroun, Côte d’Ivoire, Mali, Burkina Faso and Benin) Brazil and India will now influence cotton pricing on the international market. The new futures contract will provide an alternative to contract No. 2 which is the current sector reference worldwide, but only takes into account the particularities of the American market when determining pricing.

Yet, experts explain that, for several years now, contract No. 2 has proven vulnerable “due increased artificial price manipulation on the markets”. Basically, with the new contract, cotton prices should better reflect the cotton market context of most countries.

Although the global cotton sector is celebrating this new development, many experts are concerned about the capacities of African producers, including those of Cameroon, to respect the commitments outlined in the new contract with regards to delivery deadlines, logistics and quality.