ICA Addresses Current Trading Conditions

By Jim.Robinson|June 16, 2011

In light of the unprecedented market volatility–and the ever-present temptation to maximize profits or minimize losses by choosing not to honor a contract—the International Cotton Association (ICA) has issued the following statement to its members:

“All participants in the market face difficult trading conditions given the recent, widely divergent movement of prices within a short timeframe. Regrettably, as a result, the temptation exists not to fulfill contracts as prices fluctuate.

“The ICA has continually stressed the need for a safer trading market place which can only be achieved through contract sanctity. To that end, the mission of the ICA is to protect the legitimate interests of all those who trade cotton whether they are buyers or sellers. The ICA Bylaws & Rules support equitable trading practices and provide an impartial and effective dispute resolution service should it be required. Without this trading framework, the market for buying and selling raw cotton would be at best chaotic, and the associated increase in risk would doubtless be reflected in higher prices.

“The ICA urges all parties to cotton contracts to bear in mind that, while price fluctuations may mean some firms face short-term losses, the longer-term view of maintaining good trading relationships and ensuring contract sanctity will ultimately lead to a safer trading environment and ensure the long-term viability of all market participants.”

For more information, visit ICA’s Web site here.