Cotton's Week: October 17, 2003

Cotton's Week: October 17, 2003

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Grassley Eyes Omnibus Spending Bill for Payment Amendment
 Full Senate consideration of the ’04 Agriculture Appropriations Bill may occur during the week of Oct. 20 as part of an Omnibus spending bill incorporating other appropriations measures that have been delayed.

As part of an Omnibus bill, the ag appropriations measure would be subject to amendment. Sen. Grassley (R-IA) says he may offer an amendment to limit farm program payments.

In an NCC Action Alert to members, NCC President and CEO Mark Lange encouraged industry contacts with Cotton Belt Senators to urge opposition to any amendments to tighten payment limits, eliminate certificate redemptions or modify the cotton provisions of the new farm legislation.

“It is critical that we work to defeat any amendments that might be offered during floor consideration that would alter the cotton program and/or payment limitation provisions of the farm bill,” Lange wrote. “If the Senate rejects an effort to add a payment limit amendment to the appropriations bill, it cannot be included in the final bill since the House version does not include a payment limitation provision. If the Senate approves a payment limit amendment, the conferees will have to debate the issue. The uncertainty of whether or not a new limitation will be put in place or certificates will be eliminated will cause uncertainty and disrupt financing, marketing and cropping plans.”

The Senate Appropriations Committee approved the spending bill on July 17 with no significant amendments to the farm bill or payment limitation amendments. The Senate approved an amendment to limit payments offered by Sens. Grassley (R-IA) and Dorgan (D-ND) in February ’02, 66-31, but it was not included in the farm bill. Sen. Grassley offered a modified version of his amendment during debate on the FY04 Budget Resolution earlier this year and has consistently made public statements that he intends to continue to offer his amendment at any opportunity.

In comments to Iowa reporters early in the week, prior to the procedural change to allow amendments, Sen. Grassley said he planned to offer several amendments to the appropriations bill, including one to limit payments. He added, “It looks like” the Agriculture bill will be “wrapped into an Omnibus appropriations bill that will originate in conference” and that the bill will come to the Senate as a conference report, which is not amendable. Grassley attributed the situation to “a lot of leaders in the Senate representing Southern agricultural interests” and said he suspects they want to “make sure I don't have a forum.”




Commerce Report Draws ATMI Response
 The Commerce Department released its Textile Working Group report to the Congressional Textile Caucus, outlining what Commerce describes as improving conditions in the US textile industry since release of its initial report in September ’02.

In response, the American Textile Manufacturers Institute (ATMI) took exception to the description of the industry’s situation citing continued job losses and plant closures. ATMI said 50,000 textile jobs have been lost since the last report was issued in January.

The Textile Working Group is an interagency group organized by Commerce Secretary Evans in January ’02 when he outlined steps the Administration would take to ensure that textile and apparel industry concerns were addressed.

According to the report issued on Oct. 14, specific actions taken by the Administration “to strengthen the US textile industry” include: negotiating trade agreements, addressing intellectual property violations, expanding exports and cracking down on illegal transshipments. While citing progress, the report acknowledged that “further action and vigilance is warranted.”





Administration: ‘Chance’ for WTO Talks to Move Forward

The Chief Agricultural Trade Negotiator in the Office of the US Trade Representative, Allen Johnson, said the US wants World Trade Organization (WTO) talks to succeed, but needs to hear from other countries that they will be prepared to negotiate.

Johnson indicated it is unlikely WTO members will agree to extend the “peace clause” on agriculture, due to expire at the end of this year, unless it would help facilitate substantial progress in the negotiations. The “peace clause” effectively prevents countries from challenging each other’s farm subsidies in the WTO unless certain specific circumstances are met.

In related developments, the chairman of the WTO’s General Council, Carlos Perez del Castillo of Uruguay, has actively lobbied members to restart negotiations. In his efforts, Perez del Castillo focused on agriculture, market-access for non-agricultural goods, an African-backed initiative on cotton subsidies and the “Singapore” issues of investment, competition policy, trade facilitation and transparency in government procurement. According to Perez del Castillo, he will continue to hold private sessions with individual countries and groups of countries rather than formal meetings, with first priority given to agricultural issues widely thought to be the key to restarting the round.

Four African countries have indicated they will continue to insist on elimination of cotton subsidies but also stated they have revised their proposed timetables. The US put forth an alternative approach during the failed Cancun negotiations proposing discussions focusing on all distortions in trade and production of textiles and fiber not solely US programs. The African countries rejected the US proposal and counter-proposed that WTO members agree to eliminate export subsidies over 4 years starting in January ’05. In addition, the countries want a “transitional cotton sector support fund” established for cotton producers in least-developed countries to remain in place until all subsidies are eliminated.

During a meeting Oct. 13, Greece and Spain protested a European Union (EU) plan to reduce subsidies for cotton farmers in those countries by 40% by decoupling production and subsidies as is being done in grains and other products. The UK and Nordic countries proposed completely eliminating the EU’s cotton subsidies as a good faith effort to restart the WTO negotiations.




Repeal of China's Trade Status Sought
 Rep. Sanders (I-VT) called for repeal of the free-trade measure that cleared the way for China to join the World Trade Organization, saying that it has cost the US far too many manufacturing jobs and swelled the trade deficit.

"American workers should not be asked and forced to compete against Chinese workers who work for 30, 40, 50 cents an hour, who can't form unions, where there is no environmental protection," Sanders said. "Trade is OK if it works for both sides. This trade agreement is working for the Chinese -- not for the American worker."

He said that his bill, which would repeal the granting in ’00 of so-called permanent normal trade relations with China, has bipartisan support from 40 other members of Congress.

Sanders took aim at the trade imbalance with China, which last year hit $103 billion, the largest ever recorded by the US with any country. So far this year the deficit is 22% above last year's pace. For every $6 in products that China sells in the US, US companies sell $1 worth to China.

"The larger the trade deficit, the more decent-paying jobs we lose," Sanders said.

Sanders said the US should negotiate a trade agreement with China that is more favorable to US workers.




Senate Committee Approves EPA Nominee Leavitt
 On a bipartisan vote of 16-2 with one abstention, the Environment and Public Works Committee sent the nomination of Utah Governor Leavitt to head the EPA to the Senate for consideration.

The panel's chairman, Sen. Inhofe (R-OK), said he hoped the Senate would act quickly to confirm Leavitt. All 10 Republicans, 5 Democrats and one Independent on the committee endorsed Leavitt, with Sens. Clinton (D-NY) and Lieberman (D-CT) voting against the nomination and Boxer (D-CA) abstaining.

Two more Senate Democrats, Lautenberg (NJ) and Boxer, announced their intentions to place "holds" on the nomination, raising to 6 the number of such roadblocks Leavitt faces in the Senate.





Beltwide Early Hotel Reservation Deadline Oct. 22
The deadline for NCC and Cotton Foundation members and Certified Interest Organizations to make early hotel reservations in advance of the general public for the ’04 Beltwide Cotton Conferences in San Antonio is Wednesday, Oct. 22. The NCC-coordinated forum is scheduled Jan. 5-9 at the Marriott Rivercenter.

Hotel information and a reservation form are available from the NCC web site, www.cotton.org. The online request form is for credit card payment only.

A room deposit of $150 is due immediately upon making the reservation to confirm the room. The deposit will be refunded if cancellation is received on or before Dec. 5, after which the deposit will be forfeited.

Hotel reservations will be open to the public Nov. 3. Hotel reservations and all other policies are outlined in the ’04 Beltwide Cotton Conferences information book mailed last month. For more information, visit the Beltwide web site at http://www.cotton.org/beltwide/.





Conditional Registration Approved for AF36
In an Oct. 16 Federal Register notice, the EPA announced approval of an application on behalf of the Arizona Cotton Research and Protection Council to conditionally register the pesticide product Aspergillus flavus AF36.

The application was conditionally approved on June 24 for use on cotton in Arizona and Texas to reduce aflatoxin-producing colonies of Aspergillus flavus.





Export Sales for Week Ending Oct. 9
 Net export sales for the week ending Oct. 9 were 335,700 bales (480-lb.), resulting in total ’03-04 sales of over 4.2 million bales. Total sales at the same point in the ’02-03 marketing year were approximately 5 million bales. Total new crop (’04-05) sales are 155,800 bales.

Shipments for the week were 109,400 bales, bringing total exports to date to 1.5 million bales, ahead of the 1.3 million bales at the comparable point in the ’02-03 marketing year.





Prices Effective October 17-23, 2003

Adjusted World Price, SLM 1 1/16

56.94 cents

*

Coarse Count Adjustment

0.00 cents

Current Step 2 Certificate Value

4.86 cents

Marketing Loan Gain Value

0.00 cents

Import Quotas Open

 1

Step 3 Quotas (480-lb. bales)

 128,590

ELS Payment Rate

7.45 cents

*No Adjustment Made Under Step I
 
Five-Day Average
 
Current 3135 c.i.f. Northern Europe

70.34 cents

Forward 3135 c.i.f. Northern Europe

No Quote

Coarse Count c.i.f. Northern Europe

68.54 cents

Current US c.i.f. Northern Europe

 75.20

Forward US c.i.f. Northern Europe

 No Quote

 
'03-04 Weighted Marketing-Year Average Farm Price  
 
Year-to-Date (August)

46.30 cents

**

**August-July average price used in determination of counter-cyclical payment



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