Primary commodities play a vital role in world economies. Most of the developing countries are dependent on agricultural primary commodities. Cotton is one of the most important agricultural primary commodities because of its great importance incorporating with human needs. Since the textile industry does not need too much foreign investment and high technology, LDCs can increase their GNP by textile industry investments. Cotton traded in raw form as well as textile manufacture form. Thus in global context it is crucial to estimate the price dynamics of cotton. In this study we will try to estimate the main determinants of cotton in world to ensure that whether market clear or not in price determination process.
Keywords: Primary commodities, market model, cotton price