The world's governments are expected to have to roll over $8 trillion in sovereign debt in the coming year, and how the financial markets handle those obligations could play a role in cotton prices.
Dr. Darren Hudson, who works in the Department of Agricultural and Applied Economics at Texas tech, explained what drives commodity markets.
"There are two things that will affect commodity markets more than anything else. Interest rates and the availability of money and debt is going to be a part of that expenditure," Hudson said. "So you really have two things working against each other. You have the federal reserve trying to keep interest rates fairly low by keeping money supply high and then you have debt."
Hudson said markets are good right now and will continue to remain good for the next couple of years, however, he said in the future there is a lot more uncertainty on what interest rates will do. Interest rates, of course, are what ultimately drive those commodity prices.
"In the short term, we probably won't see that much of a difference but in the long term people will start to see the changing of the commodity markets." Hudson said.
