StoneX Markets LLC (“SXM”), a subsidiary of StoneX Group Inc. (NASDAQ:SNEX), has entered into an exclusive licensing agreement with Cotlook to launch a new suite of OTC cotton derivatives, designed to help market participants manage risk in an increasingly globalised cotton market.

The first product developed under the partnership will be the Cotlook Brazil Basis Swap, a new risk management tool referencing Cotlook’s internationally recognised cotton pricing benchmarks.

The first OTC cotton derivative will reference the Brazilian component of the Cotlook A Index, helping farming cooperatives, merchants, mills, manufacturers and other cotton market participants better manage and hedge risk. Designed with the needs of the cotton supply chain in mind, it represents a significant enhancement to the tools available for managing price exposure.

Antonia Prescott, Managing Director and Editor, Cotlook, commented:

“The collaboration with StoneX is an important evolution in our longstanding mission to bring price transparency to the international cotton industry. We are pleased to be working with StoneX to create a valuable instrument for our customers to actively mitigate the full composition of their price risk.”

Brett Phillpott, Global Co-Head of Commercial Hedging & Commodities, StoneX, added:

“Our customers in the global cotton industry have long sought the ability to manage the basis risk inherent in their international cotton supply chains. These OTC derivatives will allow them to hedge a significant portion of their price risk that was previously unhedged.

“By working with Cotlook, we are enabling our clients to leverage a well-established benchmark to strengthen their risk management capabilities and improve forward price transparency for the market.”