Cotlook Will Stop Publishing Nordic Index

Caunt Luke (Cotlook) will stop publishing the Scandinavian (NE) A index and the Nordic (NE) B index from August 1st.

Cotlook has been monitoring the international cotton price for more than 50 years.

The initial Cotlook A index was released in 1966, referring to the Liverpool port's CIF (CIF), but then changed to the Nordic port's CIF (CIF).

The aim is to compare the prices of cotton from different places on the same benchmark.

Ten years ago, the average annual cotton consumption of the 27 European Union countries was 1 million 400 thousand tons, but the current consumption is less than that of the 1/3, and is still declining rapidly.

Despite the rapid growth in global cotton consumption over the past 10 years, the consumption of EU countries has decreased significantly from 7% to 2%.

Today, the Asian market accounts for 82% of cotton consumption, from 15 million tons of 5 years ago to 21 million tons.

Because of the prosperity of the Asian market and the shrinking of the European market, Cotlook has changed the calculation basis of the Cotlook A index to the Far East port CIF (CFR) in early 2003. All the major Asian ports with low surcharges have become the price reference destinations (including Bangkok, Lin Chaban, Jakarta, China Hongkong, Penang, Klang, Singapore, Busan, Japan, mainland China, Manila, China Taiwan, Keelung, Semarang and Surabaya).

The slight differences in freight rates between other port of destination have also been taken into account.

Price terms include cost plus freight, sight L / C, 1% Commission and average profit.

Because Europe's consumption is decreasing, it can not respond to the international cotton price quickly and accurately, so Cotlook decided to stop publishing the Scandinavian (NE) A index and the Nordic (NE) B index from 08 August 1st.

Usually the Asian (Far East) A index is slightly lower than the Nordic A index of 1 cents / pound, which reflects the prosperity and competitiveness of Asian markets.

Since August 1st, Cotlook will only use the Asian A index to reflect the spot price of international cotton. This measure has been approved by the US agricultural legislature and the International Cotton Advisory Committee (ICAC).

The Cotlook A index is the cheapest 5 quotations of 19 cotton varieties, with a grade of Middling 1-3/32.

The lowest of the 5 varieties can have only two West African cotton varieties.

The 19 cotton varieties contain Uzbek cotton, but do not contain "other Central Asian cotton". If possible, Central Asian cotton will also be used as a reference.

Although the reference cotton varieties and quality parameters of the index are fixed in one year, Cotlook will maintain these indicators.

Tips:

Incoterms:

CIF -- cost, insurance and freight

CFR -- cost plus freight