WORLD COTTON

TRADING STARTS ON NOVEMBER 2

CFTC AGRICULTURAL ADVISORY COMMITTEE – September 22, 2015
“OUR CUSTOMERS TOLD US THEY WANT A 

FUTURES CONTRACT THAT ACTS AS THE PRICE 

BENCHMARK FOR WORLD COTTON. THE NEW 

WORLD COTTON CONTRACT REFLECTS THE 

GLOBAL NATURE OF TODAY’S COTTON MARKET 

AND WILL ENHANCE THE ABILITY OF COTTON 

MARKET PARTICIPANTS TO HEDGE IN A GLOBAL 

MARKET.”

Ben Jackson

President, ICE Futures U.S.

INTERCONTINENTAL EXCHANGE 2
WHY IS A WORLD CONTRACT NEEDED?

19%

OF WORLD COTTON 

PRODUCTION

41%

OF WORLD COTTON 

EXPORTS

11%

OF WORLD COTTON 

PRODUCTION

27%

OF WORLD COTTON 

EXPORTS

INTERCONTINENTAL EXCHANGE 3

The US is still the largest supplier to export buyers, but its share is decreasing 

over time as other origins increase their availability and quality. 

In 2003 / 2004 the US accounted for: In 2013 / 2014 the US accounted for:

Source: WASDE April Report
KEY TRADING CONTRACT TERMS

World Cotton will trade 

alongside the benchmark 

Cotton No. 2 contract, which 

prices cotton grown and 

delivered in the United States 

only

Classing services and quality 

premiums and discounts will 

still be provided by the USDA, 

and ICA-Bremen will also 

provide classing services for 

non-U.S. origins 

TERMS THAT MIRROR THE COTTON NO. 2 CONTRACT

Settlement at Expiry

Physical Delivery in 

Exchange-licensed 

Warehouses

Pricing US cents per pound

Minimum Tick .01 cents per pound

Trading Months

March

May

July

October 

December

Trading Hours 9:00 pm to 2:20 pm NY 

time

INTERCONTINENTAL EXCHANGE 4
KEY CONTRACT TERMS THAT ARE DIFFERENT

The par quality of the new 

World Cotton contract will be 

higher than the No. 2 contract 

par quality 

INTERCONTINENTAL EXCHANGE 5

Par Grade & Staple

Color 31/Middling

Staple 36

Leaf 3

Strength 27 gpt

Micronaire 3.5 to 4.9

Par Grade & Staple

Color 41/Strict Low 

Staple 34

Leaf 4

Strength 25 gpt

Micronaire 3.5 to 4.9

COTTON NO. 2 CONTRACT

NEW WORLD COTTON CONTRACT 
KEY DELIVERY TERMS THAT ARE DIFFERENT

The new contract will price 

delivery of multiple origins and 

allow delivery in multiple 

locations around the world 

The World Cotton contract size 

will be larger than the No. 2 

Cotton contract size

Par Origin US, with premiums and 

discounts for all other 

origins

Par Delivery Point Malaysia and Taiwan, 

with discounts for US 

and Australia

INTERCONTINENTAL EXCHANGE 6

Contract size 50,000 pounds

Contract size 55,000 pounds 

COTTON NO. 2 CONTRACT

NEW WORLD COTTON CONTRACT 

NEW WORLD COTTON CONTRACT 
WORLD COTTON CONTRACT DELIVERABLE ORIGINS

ORIGINS

US

Australia

Brazil

INTERCONTINENTAL EXCHANGE 7

India

Benin

Burkina Faso

Cameroon

Ivory Coast

Mali
SHARE OF TOTAL EXPORTS 2013 / 2014

INTERCONTINENTAL EXCHANGE 8 

Source: WASDE April Report

CFA represents Benin, Burkina Faso, Cameroon, Ivory Coast and Mali

The new World Cotton contract deliverable origins will represent 73% of world 

cotton exports

USA 27%

India 20%

Australia 11%

CFA 9%

Brazil 6%

Others 27%
WORLD COTTON CONTRACT DELIVERY POINTS

EXCHANGE LICENSED WAREHOUSES

United States

Dallas / Ft. Worth

Memphis 

Houston 

Greenville 

Galveston 

Australia 

Melbourne 

Sydney 

Brisbane 

Malaysia 

Port Klang 

Tanjung Pelepas 

Taiwan 

Port Keelung 

Port Kaoshiung 

INTERCONTINENTAL EXCHANGE 9 
LAUNCH: NOVEMBER 2, 2015*

FIRST DELIVERY MONTH: MAY 2016

INTERCONTINENTAL EXCHANGE 10

*Subject to regulatory review
• ICE trading platform, with screens already in front of the global cotton 

community

• Margin offsets for the World Contract vs. No. 2 positions

• Experience operating the No. 2 contract

• Multiple contracts serving the global sugar, cocoa and coffee trading 

communities

• Global sales and customer support presence

ICE’s demonstrated commitment to successful, physically 

delivered futures contracts that meet the needs of the 

respective commercial community

WHY TRADE WORLD COTTON ON ICE?

INTERCONTINENTAL EXCHANGE 11
QUESTIONS?

CONTACT US

MATT RYAN TIM BARRY

+1 212 748 4116 

matt.ryan@theice.com 

+1 212 748 4096 

tim.barry@theice.com 

INTERCONTINENTAL EXCHANGE 12

MORE 

INFORMATION

theice.com 

JENNIFER ILKIW

+65-6594-0160 

jennifer.ilkiw@theice.com 
DISCLAIMER

INTERCONTINENTAL EXCHANGE 13

The information provided has been compiled by ICE Futures U.S., Inc. for informational 

purposes only and should not be considered investment advice. While every attempt has 

been made to ensure the accuracy of the information within this presentation, ICE 

Futures U.S. does not guarantee that it is correct and assumes no responsibility for any 

errors or omissions. Furthermore, all information relating to the world cotton contract is 

subject to change between the date of publication and listing for trading.