The US Commodity Futures Trading Commission Launches An Investigation Into The Ups And Downs Of Cotton Prices

According to two people familiar with the matter, cotton prices in March were abnormally heavy ups and downs and blocked farmers' sales. Now the US Commodity Futures Trading Commission (CFTC) is investigating the matter.

The findings may be announced tomorrow.

The Washington based Commission is also examining possible inappropriate pactions in the oil market, but they start with cotton because of an abnormal gap between cotton futures and spot prices.

The price of cotton futures in the US futures market rose to a 12 year high in March 5th, and then dropped by 26% in March 20th, ICE.

The supply of goods has not increased. Cotton Traders told the Committee at the hearing that speculators played a role in the rise in commodity prices in April.

On Saturday, Roger Haldenby, President of land cotton processing in Lubook, Texas, said: "in recent months, farmers, cotton merchants and shippers have been unable to do business because they are unable to hedge their positions properly.

CFTC spokesman Dennis Holden said on Saturday that the Commission had not commented on the ongoing investigation.

The market for CFCT management includes silver, soybeans, products derived from the stock index, and bonds. The committee is under pressure from Congress. Congress has asked them to guarantee that the commodity market is free from human manipulation, while gold, copper, corn and wheat prices have reached a new high.

Last year, the Reuters-Jefferies CRB index jumped 37%, a record high of $22 in May, and the doubling of oil was the highest index in Reuters-Jefferies.

Cotton grew by 48% last year, a eighth increase in 19 of CRB's products.

In March 5th, the price reached 92,86 cents per pound, the highest point since September 1995, and dropped to 69,02 cents in March 20th.

On Friday, on the ICE futures exchange, the December cotton contract fell 0,27 cents, or 0,4%, to 74,37 cents per pound.