Cotton's Week July 6, 2001

Cotton's Week July 6, 2001

Cotton's Week: July 6, 2001

'Reasonable Chance' for China WTO Entry by End of Year

World Trade Organization (WTO) working party completed round of talks July 4 with confidence that China is en route to becoming member. According to chairman of WTO’s working party on Chinese accession, negotiators reached agreement on 10 of 12 outstanding issues related to China’s accession.

One US official involved in talks said there is reasonable chance China could become member by end of year. Working party report and protocol of accession which will spell out China’s rights and obligations as WTO member will be prepared once texts are completed on issues including agriculture; application of anti-dumping and countervailing duties on Chinese imports by WTO members; industrial policy; judicial review; product-specific safeguards, including safeguards on textiles; sanitary and phytosanitary measures; intellectual property rights and other issues. Working party report and market access schedules, along with bilateral concessions China made to trading partners, will be prepared for Dubai ministerial meeting scheduled this fall.

US and China completed key agreement on agriculture June 8 in Shanghai. China agreed to cap domestic support for agriculture at 8.5% of annual value of output. China had insisted on being granted developing country status, which would have exempted up to 10% of value of annual agricultural production from restrictions on domestic support. China also agreed to forego rights under Article 6.2 of WTO agriculture agreement, which allows developing countries unlimited spending "for investments on input subsidies intended to encourage agriculture and rural development for low-income or resource-poor farmers."

Chief Chinese negotiator Long Yongtu said China had to take pragmatic view in foregoing developing country status, but he said China has rejected request to reduce average tariffs to levels of developed countries and would only open markets to services at levels consistent with commitments by other developing countries. Long told reporters two-thirds of China’s agriculture support is "green box" and one-third is "amber box."

According to figures provided by China, value of country’s agricultural production averaged $250 billion between ’96 and ’98. Green box subsidies averaged $18 billion and amber box subsidies averaged $3.5 billion, or about 1.4% of total production value during that period.

FTAA Draft Negotiating Text Released

Free Trade Area of the Americas (FTAA) draft negotiating text was made public, fulfilling commitment made by trade ministers at Quebec City Summit of the Americas last April. U.S. Trade Representative Zoellick welcomed release and said Office of USTR will solicit comments on draft text through Federal Register notice to be published in near future.

FTAA negotiations involve 34 Western Hemisphere countries working to develop agreement on formation of free trade area by completing negotiations January ’05, with implementation beginning December ’05. Draft text is posted on FTAA’s official web site at

High Court Decision Strengthens Property Rights

In Palazzolo v. Rhode Island, US Supreme Court ruled that subsequent owner of property does not lose right to claim that regulatory scheme has taken property rights, even though regulatory scheme was in place prior to transfer of property. Essentially Court held that if restrictions on property use justified compensation to prior owner of land, prior owners must be understood to have transferred full property rights to new owner. Therefore, new owner could legitimately claim property rights had been taken by government restrictions on use of land.

In opinion, Court outlined basics of property rights and legitimate state interests. Right to improve private property is subject to reasonable exercise of state authority, including enforcement of valid zoning and land-use restrictions.

Court stated that Takings Clause of US Constitution allows landowners, in certain instances, to assert that particular government restrictions are so unreasonable or onerous that state must provide compensation for depriving owner of value of property. Court stated that restrictions on use of property do not become less unreasonable through passage of time or title. Transfer of property after enactment of regulations restricting its use does not absolve state of obligation to prove restrictions do not violate Takings Clause.

Genetically Enhanced Plantings Climb 18% on US Cotton Farms

Latest USDA survey shows US cotton farmers planted genetically enhanced seed on 11.2 million acres this year, 69% of total cotton acreage and 18% more acres than last year. US farmers used genetically enhanced seed on 82.3 million total acres this spring, 18% more than last year.

Guided by spring surveys of farmers by USDA and others, agriculture industry had expected overall sales of transgenic seed to grow modest 10% this year.

According to June survey, 68% of all soybeans planted in US this spring were genetically enhanced varieties, compared with 54% of soybeans planted last year. Plantings on 51.2 million acres represented increase of 17.5% from 40.2 million acres planted last year. Corn farmers planted genetically enhanced seeds on 19.8 million acres this spring, just 26% of total corn acreage and essentially flat compared with last year.

EPA Cumulative Risk Assessment Set for ’02 Completion

EPA released plan for completing Food Quality Protection Act (FQPA) cumulative risk assessment on organophosphate (OP) pesticides at Cumulative Working Group of Committee to Advise on Reassessment and Transition (CARAT) meeting in Washington, DC.

Agency plans to release preliminary cumulative risk assessment in December and final assessment prior to August 3, ’02, date mandated by FQPA for EPA to complete 66% of all tolerance reassessments. Completion of cumulative risk assessments would allow EPA to use more than 1,000 OP tolerances to meet FQPA requirement. As part of this effort, agency plans to release number of science policy documents later this summer.

EPA also discussed with working group development of public input process for cumulative review. Working group members suggested using Internet and other means to increase public input.

Attaché Sees Mexico's Cotton Imports Lower in ’01-02

Mexico is forecast to import just 1.75 million 480-pound bales of cotton in ’01-02 marketing year, down from 1.9 million in ’00-01, according to USDA attaché report. Attaché said he expects Mexican demand for cotton to continue falling because of local slowdown in demand as well as stronger than normal peso.

"Consumer demand for textile products is declining...and will likely continue falling next year as a result of the slowdown of the US economy and the strong peso," report noted. "According to private industry sources, Mexico's cotton industry is vulnerable to the effects of the appreciating Mexican peso, which has significantly decreased the competitive advantage of Mexico's textile exports to the US. A main user of Mexican cotton is the textile industry."

Mexico's cotton production for ’01-02 is forecast at 440,000 bales, an increase from 332,000 bales in ’00-01, but still relatively weak when compared to earlier years.

Proposal Readied for Protecting
Endangered Species from Pesticides

EPA plans to publish proposal for public comment by end of year on new approach for protecting endangered species from pesticides.

Under expected system, pesticide labels will require product users to obtain and examine county bulletins on endangered species. Users choosing not to follow bulletins would be liable under Endangered Species Act for any detected harm to such species. If bulletins were followed, EPA and not users would be liable for any allegations of taking or harm. Some few "high risk" pesticides would have label requirements for advisories on bulletins.

Federal government will enforce provisions of new system, and it will not be voluntary program, said Arty Williams of EPA’s Office of Pesticide Programs. Limited terrestrial and aquatic monitoring will seek to determine how much pesticide is entering endangered species habitats. Endangered species program at EPA has limited funding, and monitoring will have to be targeted, perhaps on one region or state that has most endangered species.

State officials will have opportunity to view proposal before it is submitted for public comment.

Pesticide Levels Higher in Urban Waters

Concentrations of pesticides in certain urban waters were found to be much higher than in waters running through agricultural areas, according to US Geological Survey (USGS) reports following examination of water quality in 16 major river basins and aquifers. Report shows that challenges remain in protecting aquatic resources from non-point source pollution.

Key "pesticide signatures" found in waters of mainly agricultural areas include herbicides atrazine, metolachlor and alachlor. In urban areas, USGS researchers found elevated concentrations of insecticides such as diazinon, malathion and chlorpyrifos.

Concentrations of pesticides in these areas were higher than concentrations of herbicides in agricultural areas. Furthermore, concentrations of pesticides in agricultural waters were generally below levels recommended by EPA whereas, in urban areas, diazinon concentrations were above levels considered safe for aquatic life.

Such data are useful for EPA and state regulators in their strategies for regulating impaired waters. EPA is in process of designing consolidated assessment and listing methodology to strengthen state programs, including monitoring and identifying impaired waters.

Cotton Sales Down in Latest Week

Net export sales for week ending June 28 were approximately 45,300 bales (480 lb.), about 25,200 bales lower than previous week’s sales, raising total ’00-01 sales to slightly over 8.25 million. Total sales at same point in ’99-00 marketing year were almost 7.7 million bales.

Shipments for week were 154,900 bales, bringing total exports to date to approximately 6.0 million bales, down from 6.39 million at comparable point in ’99-00 marketing year.

Seedling Disease Booklet Available

Beltwide Cotton Seedling Diseases Committee, in conjunction with Aventis CropScience and The Cotton Foundation, developed new informational brochure to help growers identify seedling diseases, inform them of treatment methods and educate them on impact seedling disease can have on cotton yields. Those interested in obtaining copy may contact Carolyn Bartow, NCC’s Technical Services Dept., at (901) 274-9030, or order by mail at PO Box 820285, Memphis, TN 38182.

Effective July 6-12, ’01

Adj. World Price, SLM 11/16       32.47 cents*
Coarse Count Adjustment            0.00 cents
Current Step 2 Certificate Value   1.99 cents
Mktg. Loan Gain Value             19.45 cents

*No Adjustment Made Under Step I

Five-Day Average

Current 3135 c.i.f. N. Eur        46.46 cents
Forward 3135 c.i.f. N. Eur        46.11 cents
Coarse Count c.i.f. N. Eur        44.48 cents
Current US c.i.f. N. Eur          49.70 cents
Forward US c.i.f. N. Eur          52.25 cents