Since they agreed earlier this year to buy thousands of bales of cotton when prices were at record highs, cotton mills have seen prices tumble 57%. So, as delivery time nears and bills come due, some have decided not to pay up.
Just how binding is a binding agreement?
In the cotton market, dozens of remorseful buyers are putting that question to the test.
In a phenomenon that may be unique to the cotton market, contracts are considered by many buyers to be little more than a message of intent, with any agreement up for negotiation. And because the market is so farflung—merchants in the U.S. often trade with thousands of small buyers in Bangladesh or Indonesia—regular legal battles can be costly and lengthy.