Spinners Need Hedgin Tools to Manage Risk

摘要

For the last couple of years, Bangladesh has been facing enormous challenges in sourcing cotton to feed its $20 billion apparel industry. For a country considered a rising textile power, the challenges have been the painful reminders of the intractable problems plaguing Bangladesh. Several events that marked the 2010/11 cotton-year have changed the landscape of Bangladesh cotton industry and will have an impact well into the future. After India's export ban and possibly market manipulation by speculative traders, the ICE futures settled at an unprecedented level of 214 cents/lb in March 2011. Bangladeshi spinners took a considerable position in Indian cotton before the export ban in April 2010, only to find the Indian merchants defaulted on contracts en masse. Panicked Bangladeshi buyers rushed to recover their losses and took random positions in the international market without realizing the risks. This is partly because a majority of Bangladeshi spinners have limited knowledge of the commodity markets.