Cotlook A Index

The Cotlook A Index is a daily average of the cheapest cotton offers from the world's main exporting origins, widely used as the reference price for physical cotton trade.

Physical cotton trades in a wide range of grades and origins, with no single dominant futures delivery point the way grains or metals have, so the industry relies on the Cotlook A Index as its shared reference price. It is calculated daily as an average of the lowest-priced cotton offers available from the main exporting countries, meant to represent what a buyer could actually source in the world market at that moment.

Because it tracks actual offers rather than a futures price, the Cotlook A Index responds directly to shifts in which origins are offering the cheapest cotton, and it can move even when futures markets are quiet. Contracts for physical cotton around the world are commonly priced as a differential to this index rather than to a futures settlement price.