As rising oil prices—driven by the war involving Iran—increased the costs of synthetic fibers, cotton has become attractive once again. For the first time in two years, hedge funds have moved into a net long (buying) position, and prices have entered a strong upward trend in recent weeks.
Date: April 20, 2026
The surge in energy prices following the Iran war has increased the cost of synthetic fibers, turning the global commodity markets’ attention back to cotton.
For the first time after a nearly two-year hiatus, hedge funds and asset managers have moved to a net long position in cotton. According to data from the U.S. Commodity Futures Trading Commission (CFTC), long positions exceeded short positions by 16,825 contracts in the New York cotton market for the week ending April 14. This ended a streak of net short positions that had persisted since April 2024.
The Driving Force: Energy Costs The primary driver behind this market shift is the rise in energy prices. As oil prices climb, the cost of oil-based synthetic fibers like polyester and nylon increases, making cotton a more competitive alternative. According to Bin Hui Ong, an analyst at BMI (a Fitch Solutions company), this situation could lead to a shift in raw material preferences among textile manufacturers.
Textile producers in Asia are heavily dependent on the Gulf region for inputs used in chemical fiber production. Consequently, the increase in energy and petrochemical costs may prompt manufacturers to lean toward using more cotton in their product mixes.
Prices Near Two-Year Highs According to a report by Bloomberg, there is a notable upward movement on the price front as well. Cotton futures have risen by approximately 22% since the start of the war, approaching their highest levels in the last two years. The upward trend, which has lasted for six weeks, indicates strong momentum in the market.
Source: Patronlar Dünyası/ Prepared by: İlayda Gök