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Commodity Investing: Maximizing Returns through Fundamental Analysis by SARAH MULHOLLAND, JESS GASPAR, JOHN ECKSTEIN, ADAM DUNSBY

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CHAPTER 19

Cotton

Cotton is the soft fiber seed casing of the cotton plant that is grown world-wide in tropical and subtropical regions. The fiber is spun into thread and used to make a textile or cloth. Cotton has been in use for more than 5,000 years, with the Romans and the Persians being among the first empires to use cotton goods as a currency in world trade. Cotton spread north to Europe and eventually to the Americas, where it became the first cash crop of the colonies.

The Industrial Revolution in Europe brought about the creation of the cotton mill, which sped up the process of spinning and weaving the cotton fiber into cloth. However, the separation of the cotton fiber, or lint, from the seed was still being done by hand. This changed in 1793, when Eli Whitney patented a machine called the cotton gin. The cotton gin separated the lint from the seed, allowing each worker to produce more lint at a faster pace than ever before. Both the cotton mill and cotton gin further launched the economic power of cotton. Its economic importance in many countries around the world resulted in cotton being known as white gold.

Cotton is the world's most important textile. It is used in hundreds of textile products, including clothing, bed sheets, and bath towels. All parts, not just the cotton fiber, of the cotton plant are valuable. The cottonseed part of the cotton plant is an oilseed like soybeans. Cottonseed is crushed to produce its three products: cottonseed oil, cottonseed meal, ...

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