Results 1 to 18 of 18

Thread: Cotton as a Peak Oil Investment?

Threaded View

  1. #1
    Join Date
    Sep 2009
    Location
    Madrid / Spain
    Posts
    244

    Default Cotton as a Peak Oil Investment?

    Hello all,

    For the last week I have been considering the possibility of investing in cotton. Here are my main reasons.

    1.- Cotton is heavily subsidized by the US government, and that means that its price is artificially low. Since the US has heavy deficits and is starting to take fiscal measures, it is possible that this particular subsidy is cancelled. Only a handful of cotton farmers are benefitting from subsidies, so it looks easy to cancel them.

    http://www.thehindubusinessline.com/...?homepage=true

    2.- Since arable land does not increase and population grows, it is possible that more land will be used to grow corn and other biofuel products, in an effort to fight PCO. This would make cotton scarcer, hence more expensive.

    3.- The main competition to cotton are artificial fibers, such as polyester, made from oil. Cotton has been losing share to fibers for decades, being now in an all time low of 33% (http://www.cirfs.org/KeyStatistics.aspx). Within a PCO context oil-made fibers would

    a.- Become more expensive, lifting the price of cotton
    b.- It is possible that governments would advice reducing synthetics fabrication, in an effort to preserve oil, lifting again the cotton price.

    4.- Yields for cotton have not improved since 2007 (http://www.cotcorp.gov.in/statistics.aspx#area). These increasing yields were a powerful factor in controlling the price of cotton.

    I would like to know if some other iTuliper has been thinking along similar lines and wants to comment something, point to some error with my reasoning, give further reasons to why cotton is an excellent PCO investment, and so on.
    Last edited by Alvaro Spain; 02-15-13 at 02:05 AM. Reason: to improve readability

Similar Threads

  1. Replies: 0
    Last Post: 03-11-12, 09:16 AM
  2. Cotton the best bet on inflation? Not gold?
    By touchring in forum Rant and Rave
    Replies: 3
    Last Post: 02-18-11, 08:45 AM
  3. Possible Peak Oil Investment?
    By Alvaro Spain in forum Energy
    Replies: 1
    Last Post: 12-22-10, 08:58 PM

Bookmarks

Bookmarks

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •  
Opinions expressed herein are those of the posters, not those of iTulip, Inc., its owners, or management. All material posted on this board becomes the intellectual property of the poster and iTulip, Inc., and may not be reposted in full on another website without the express written permission of iTulip, Inc. By exception, the original registered iTulip member who authored a post may repost his or her own material on other sites. Permission is hereby granted to repost brief excerpts of material from this forum on other websites provided that attribution and a link to the source is included with the reposted material.

Nothing on this website is intended or should be construed as investment advice. It is intended to be used for informational and entertainment purposes only. We reserve the right to make changes, including change in price, content, description, terms, etc. at any time without notice. By using this board you agree that you understand the risks of trading, and are solely responsible for your own investment and trading decisions. Read full legal disclaimer.

Journalists are not permitted to contact iTulip members through this forum's email and personal messaging services without written permission from iTulip, Inc. Requests for permission may be made via Contact Us.

Objectionable posts may be reported to the board administrators via Contact Us.

-->