Cotton, the so-called "fabric of our lives", is back in vogue with investors. It has trumped heavyweights such as gold and oil, whose gains pale in comparison.
Cotton prices have jumped more than 70 per cent in the first 10 months of this year, making it the best-performing commodity in the market.
Prices reached 15-year highs above US$1 a bale this month, and this week hit $1.0640 a pound on ICE Futures US.
"When [cotton] moves, it can be substantial so funds keep a close eye on it," said Sharon Johnson, a cotton expert at First Capital Group, the financial advisory firm based in Atlanta, Georgia.
Ms Johnson, who started out in a company that specialised in agricultural hedging in the 1980s, is a self-confessed cotton addict.
"Once I was in, I was hooked," she said. "Investors have an affinity for cotton that I can't quite explain. I had no idea what I was getting involved in, as cotton is grown around the world, consumed around the world and far more complicated than other agricultural commodities."
Cotton is associated with both a strong and weak global economy, making it a rare commodity.
It moves either in sync with grains and soybeans or with stocks and crude oil. Hardly surprising, then, that it has weathered the volatility of the past few months.
As international trade is set to rise 26 per cent from 2008 to 38 million bales this year, according to the US agriculture department, cotton is looking like the next big product for shrewd investors.
Its price rise is partly a response to flooding across the major producing countries.
Monsoonal weather hit crops across China, Pakistan and India. But Pakistan, one of the earliest countries to harvest cotton in the northern hemisphere, set off a daisy chain of events when it lost 13 per cent of its crop last year.
High grain and oilseed prices dragged on cotton production in nearly every major producing country. It led to the sixth-lowest world crop since 2003.
Coupled with the resurgence in cotton demand, the third largest on record, world stocks fell by 28 per cent to 43.7 million, a decline of nearly 17 million bales last year.
"Low mill inventory, a lack of cotton at a critical juncture due to damaging weather this fall, smaller stocks in exporting countries and a smaller world crop set off a bidding war for any or all available cotton," said Ms Johnson.
Niche commodities such as sugar and Arabica coffee have been among the most volatile markets this year.
Unstable price movements have favoured many soft commodities, and in the past month sugar rose to 30-year peaks of 33.32 cents a pound, while Arabica coffee reached a 13-year high of $2.20 a pound.
But soft commodities paid a heavy price on concerns of economic slowdowns in China and Europe.
Raw sugar for March delivery dropped 0.4 per cent yesterday to 25.94 cents a pound on ICE Futures US in New York, while Arabic coffee slipped 0.9 per cent to $1.9960 a pound.
Global agricultural markets have become closely tied to growing meat consumption in China that has driven imports of soybeans and corn for animal feed.
But speculation that the country will curb inflation, including potential price controls on food, has weighed on agricultural futures.
Soybean futures fell sharply to $11.80 per bushel on the Chicago Board of Trade yesterday, while corn dropped to a six-week low of 3.09 per cent to $5.10 per bushel.
Dollar-denominated commodities, in particular oil, have also been affected, although at a narrower rate, as they remain critical to the global economy.
Since the US Federal Reserve unveiled a $600 billion (Dh2.2 trillion) stimulus plan this month, the dollar has risen nearly 3 per cent against a basket of currencies, after an initial drop.
Oil prices rallied to a high of about $89 a barrel this month, although it dipped to $84.38 a barrel yesterday.
Crude oil prices have averaged $75 a barrel this year and are expected to jump to $100 a barrel by the end of next year.
But this would be the result of increased demand and dwindling spare capacities rather than a tie to currency, said Amrita Sen, an oil and energy analyst at Barclays Capital.
OPEC's spare capacity was 5.5 million barrels of oil per day at the beginning of last year, and now stands at 5 million, according to figures from BarCap. Ms Sen expects capacity to fall to 4 million by the end of next year.
"This would represent less than 5 per cent of global demand … and historically less than 5 per cent threshold is the difference between calmer and more volatile market," she said.