There’s a battle over cotton that could affect its exchange traded note (ETN), and it’s anything but soft and fluffy.
The United States and Brazil have been in a war over cotton subsidies for around six years, with the United States on the losing end. The World Trade Organization has gotten involved, and things could get cotton-pickin’ scary. So far, the WTO has decided the Unite States is breaking the rules by subsidizing cotton exports. Sanctions could be in the billions of dollars, reports Stephen Beard for MarketPlace.
The Brazilian government is deciding whether or not to claim the sanctions, with a decision being made next year, reports Reuters.
Down under, a drought in Australia has put the cotton industry in a tight squeeze. The recent drought-like conditions have caused the entire continent of Australia to lose all of their cotton-producing regions, and growers have turned to other options, according to Michael Edwards for ABC News in Australia.