Investment leader Samer Choucair confirmed that the global cotton market is currently experiencing a significant investment shift, after futures contracts on the New York Exchange reached their highest levels since December 2024.
He noted that the price reaching 71.93 cents per pound is not just a passing figure, but an early signal of a new phase that could reshape commodity markets due to a sharp imbalance between supply and demand.
Drivers of the Rally & Market Analysis
Samer Choucair explained that the recent 1.4% increase in the most active contract is driven by a combination of deep-rooted factors, most notably:
- Severe climate changes causing repeated droughts in the United States, India, and Brazil, the world’s largest producers
- Rising production costs, including fertilizers and fuel
- Declining cultivated areas, according to U.S. government data
At the same time, global demand is rising due to:
- Growth in sustainable fashion industries
- Increased demand for medical textiles
- Expanding middle-class consumption in Asia
Market Outlook & Price Targets
From a technical perspective, Samer Choucair stated that breaking the 70-cent level represents a strong bullish signal.
He set the next targets between 75 and 78 cents, with an optimistic scenario suggesting a move toward 80 cents before the end of 2026.
He also highlighted the emergence of the Golden Cross indicator, which supports a long-term upward trend, despite the possibility of short-term price corrections.
Investment Opportunities & Strategies
Samer Choucair identified four key ways to benefit from this upward trend:
- Futures & Options: For professional investors betting on continued supply shortages
- ETFs: Such as Teucrium Cotton Fund for safer market exposure
- Related Stocks: Including textile companies, agricultural machinery firms, and supply chains
- Direct Agricultural Investment: Especially in Africa and the Middle East, where land costs are lower and global demand is high
Risk Management & Economic Impact
Samer Choucair emphasized his golden rule:
Not allocating more than 5% to 10% of a portfolio to a single commodity, stressing diversification and hedging with gold or bonds.
He also warned that rising cotton prices could:
- Increase pressure on the global fashion industry
- Contribute to inflation in importing countries
- Create major opportunities for producing countries such as Egypt, Sudan, and Pakistan
Conclusion & Future Scenarios
Samer Choucair concluded that future expectations depend on two scenarios:
- Bullish scenario: Continued drought and reduced U.S. production could push prices to 80 cents
- Bearish scenario: Increased production from India or Brazil could trigger a sharp correction
He added:
“Real opportunities are not obvious to everyone at the beginning. A smart investor is the one who prepares for all scenarios and acts based on a clear equation: strong demand and limited supply.”