Cotton Marketing
LDC’s cotton lint is highly regarded internationally. We are the supplier of choice for spinning mills across Bangladesh, China, India, Indonesia, Japan, Korea, Thailand, Turkey and Vietnam.
We are also the industry leader in the trading and marketing of Australian cottonseed. Our extensive domestic network, global footprint and international reputation enable us to buy growers’ cottonseed for a competitive price.
Cotton Marketing
With the largest cotton marketing network in Australia, our supply chain infrastructure allows us to deliver premium Australian cotton to international mills, with efficiency as a priority. We know our cotton growers all have unique preferences and priorities, which is why we offer a range of contract types.
Fixed Price Market Order
Growers indicate the quantity of bales they are willing to sell at a specified price. These are generally placed as a Good Until Cancelled Order (GTC). This can be done under two structures: Cash or Daily Pool.
Cash Offer
Get an indicative daily cash price in AUD, published in our Daily Market Report and also available via SMS. This is calculated with reference to the current New York Stock Exchange Futures Price, the AUD/USD exchange rate and a set basis level. Cash sales are paid 14 days from the date of ginning, and the number of bales is fixed.
Daily Pool Offer
Similar to the Cash Offer, except in two regards:
- The basis component of the contract price is indicative only.
- Payments are made in accordance with a pool payment schedule, which is fixed by LDC at the beginning of the season.
Subject to approval, growers may elect to accept each of the above products on a Force Majeure basis, such that when events beyond their control (such as extreme weather) limit ability to deliver the agreed number of bales, LDC may bear the production risk in exchange for an adjustment to the price on offer.
Warehouse Contracts
In this agreement, growers specify the number of bales to be placed in their warehouse contract, after consultation with the LDC account manager. These bales are committed to LDC, but they are unpriced.
There are no fees attached, and we may offer an interest-free advance on the bales. This allows growers to have their cotton fully ginned and gives the opportunity to delay pricing until the day prior to the first notice day of the December contract, which is in November each year.
Cottonseed Marketing
Accurate documentation and timely shipping underpin LDC’s reputation as a premium supplier of Australian cottonseed. Thanks to our efficient logistics network, we purchase growers’ cottonseed at competitive prices, while offering a range of gin for seed contracts.
Fixed Bale Contract
Working with their local account manager, growers can agree to supply a fixed number of bales at a specified ginning price. If they choose to price their seed with LDC, this is known as a Net Ginning for Seed contract. If they retain seed for their own use, this becomes a Retained Seed contract.
Force Majeure (FM)
Growers may negotiate a Force Majeure agreement with their account manager, such that in circumstances when events beyond their control (such as extreme weather) limit ability to deliver the agreed number of bales, LDC may bear the production risk in exchange for an adjustment to the price on offer. Growers may elect to price their seed on the day or retain it.
Balance of Crop
In consultation with their account manager, growers nominate a specified number of bales they will produce, based on the number of hectares planted. As with a Force Majeure contract, LDC will bear the risk, but all bales produced must be ginned by LDC. Growers and their account manager agree upon a ginning and seed price at the time of the commitment.
Balance of Crop contracts can also be completed for future seasons, locking in the gin price for a specified time – such as three years – with the seed priced season by season. This protects growers from unexpected ginning price increases.