Cotton's Week: July 22, 2005

Cotton's Week: July 22, 2005

enlist

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CAFTA Vote Likely Next Week

With the Senate having approved DR-CAFTA implementing legislation last month, a House vote on the agreement now is likely during the week of July 25.

The President toured NCC member, Stowe Mills in Gaston County, NC, on July 13. He was met and accompanied by NCC Director and Stowe Mills’ President Harding Stowe. The visit was one of a number of events during which the President stressed his support for and the importance of CAFTA – both economically and for national security – “to secure democracies in the neighborhood.”

Participants in the NCC’s ’05 Policy Education Program – a Syngenta-sponsored Cotton Foundation project – visited Washington as part of their program. They attended a CAFTA event at the Organization of American States during which the President addressed a gathering of agriculture and business representatives to emphasize his support for CAFTA and to urge the House to approve the CAFTA implementing legislation.

Meanwhile, Cotton Belt Republicans are urging agriculture groups to redouble education efforts on CAFTA. In an unusual development, 10 Republican House members wrote a letter urging agriculture groups, including NCC, to make sure their members fully understand CAFTA’s benefits and to express those views to Congressional members prior to and following the vote. The letter noted that an all-out campaign in opposition to CAFTA is being organized by labor organizations and suggested that pro-CAFTA groups need to do a better job of communicating CAFTA benefits. The letter was signed by Reps. Kingston (R-GA), Price (R-GA), Carter (R-TX), Gohmert (R-TX), Conaway (R-TX), Wicker (R-MS), Westmoreland (R-GA), Keller (R-FL), Myrick (R-NC), and Blackburn (R-TN).

State-by-state data and a fact sheet are available on the NCC web site. A number of NCC leaders have submitted letters to newspaper editors in support of CAFTA. NCC also continues to communicate with House members in advance of next week’s scheduled vote.



Cottonseed Comments Due July 25

The National Cotton Ginners Assoc. and American Cotton Producers submitted joint comments in response to USDA’s proposed rule that would implement the cottonseed assistance program authorized in the Emergency Hurricane Supplemental Appropriations Act, ’04. The Act included an appropriation of $10 million to be used to provide assistance to producers and first-handlers of the ’04 crop of cottonseed in counties declared a disaster by the President due to ’04 hurricanes and tropical storms.

The comments urged USDA to take steps to significantly reduce the administrative burden placed on ginners by the proposal to require gins to collect, reconcile and verify all data documenting loss of production for the ’04 crop of cottonseed in eligible counties which resulted from hurricanes and tropical storms. The ginners and producers reminded USDA that the program would be implemented at the same time the ’05 crop harvest is underway. The comments included several suggestions to streamline the process and reduce the administrative burden on the gins, while ensuring timely distribution of benefits.

Senate Agriculture Committee Chairman Chambliss (R-GA) was joined by 9 of his colleagues in urging USDA to modify the proposed rule….“it is our belief that the U.S. Department of Agriculture can and should identify a more efficient, less burdensome way to deliver this cottonseed program.” Senators co-signing the letter:  Sessions (R-AL), Lott (R-MS), Cochran (R-MS), Isakson (R-GA), Martinez (R-FL), Dole (R-NC), Vitter (R-LA), Nelson (D-FL) and Landrieu (D-LA).

A letter sent by 9 House members also urged USDA to modify the proposed rule to streamline the program. Members who signed:  Everett (R-AL), Bonner (R-AL), Cramer (D-AL), Aderholt (R-AL), Bishop (D-GA), Kingston (R-GA), Marshal (D-GA), Miller (R-FL) and Boyd (D-FL).



FSA Sets Disaster Program Close

USDA’s Farm Service Agency (FSA) intends to end sign-up for the ’03-04 Crop Disaster Program (CDP) on Sept. 9, ’05. Sign-up began March 14, ’05.

The deadline is necessary because on or about Oct. 3 the FSA computer system begins rolling over to ’06 data and access to ’03 crop data becomes limited.  The system only has capacity for 3 years of data. Consequently, county offices will have to verify that applications and supporting documents related to ’03 CDP are recorded properly prior to Oct. 3. The announcement that Sept. 9 would be the last day for signup was distributed to county offices in Notice DAP-226 on July 13.


Measure Targets China Trade Practices

Ways and Means Chairman Thomas (R-CA) expressed support for legislation that could strengthen the US response to China’s unfair trade practices, including maintenance of an undervalued currency designed to gain a competitive advantage for Chinese products in international trade.

HR 3283, Trade Rights Enforcement Act, authorizes the application of US counterveiling duty (CVD) law to non-market economies, including China. Currently, US counterveiling duty laws do not apply to non-market economies. Other provisions would authorize establishment of a comprehensive monitoring of China’s compliance with obligations related to intellectual property rights. The legislation also would require Treasury to define “currency manipulation” and clarify legal protections against China.

The NCC has been an active member of the Fair Currency Alliance led by the National Assoc. of Manufacturers. The Alliance consistently has urged the US government to insist that China revalue and ultimately float her currency.

Currency values are outside the scope of the WTO and the US government has rejected industry petitions that would have defined the maintenance of an undervalued currency to gain an unfair advantage in international trade as actionable.

The bill, sponsored by Rep. English (R-PA), is a modification of earlier legislation (HR 1216) that would have imposed a duty on Chinese products if China’s currency was not revalued by a certain date. A vote on the Senate version of that legislation was scheduled for July, but postponed at the request of the co-sponsors after they received assurances from Treasury Secretary Snow and Federal Reserve Chairman Greenspan that China had signaled its intention to begin the process of revaluing her currency in August.

On July 21, the Yuan was revalued higher against the US dollar when China announced it would no longer have its currency tied to a fixed rate against the US dollar and instead will be using a managed floating exchange rate regime based on market supply and demand with reference to a basket of currencies.

The exchange rate of the US dollar against the Yuan was adjusted to 8.11 Yuan per US dollar on July 21, a 2% drop from the previous rate of 8.28. While Thursday’s revaluation was small (it’s estimated that China’s currency is about 40% undervalued), it could help reduce competition from lower-priced Chinese imports because a dollar would buy fewer Yuans. A stronger Yuan also could increase US exports to China by making US goods cheaper in China.

The House is scheduled to consider HR 3283 the week of July 25.


More Safeguard Petitions Accepted

The Committee for the Implementation of Textile Agreements (CITA) agreed to consider a request submitted on June 22 by the US textile industry for safeguard action limiting imports of cotton and manmade fiber curtains and drapery (Category 369 part / 666 part) from China.

A Federal Register notice was published by CITA on July 15 seeking public comments regarding the request. This launched a 30-day period during which interested parties may submit comments on the request. Comments must be submitted by Aug. 28 to the Chairman, Committee for the Implementation of Textile Agreements, Rm 3001A, US Dept. of Commerce, 14th and Constitution Ave., NW, Washington, DC20230. A copy of the request and the Federal Register notice is at http://otexa.ita.doc.gov/Safeguard05.htm.

CITA then will make a final decision within 60 calendar days of the public comment period closing. If CITA makes an affirmative determination that imports of cotton and manmade fiber curtains and drapery from China are disrupting the US market, CITA will request consultations with China. As of the date consultations are requested, a quota would be put in place to limit US imports from China of cotton and manmade fiber curtains and drapery with respect to which CITA has reached an affirmative determination of market disruption. Consultations then would be held within 30 days of China’s receipt of the request for consultations with a time frame to reach an agreement within 90 days of the request for consultations’ receipt.


County Committee Deadline Extended

Agriculture Secretary Mike Johanns announced that USDA is extending the deadline to nominate eligible candidates to serve on FSA county committees to Aug. 15, ’05. The nomination deadline was Aug. 1, ’05.

Committees apply their judgment and knowledge to make decisions on county commodity price-support loan eligibility, establishment of allotments and yields, conservation programs, disaster programs, employment and other farm program-related issues.

Individuals may nominate themselves or others as a candidate. In addition, eligible candidates can be nominated by community-based and other organizations in the county where the election is being held before the close of the nomination period, especially groups representing socially disadvantaged farmers or ranchers. Nominations and elections are open to all eligible candidates and voters without regard to race, color, religion, nation origin, age, sex, marital status or disability.

The nomination form (FSA-669A) is available at USDA Service Centers and online at: www.fsa.usda.gov/pas/publications/elections

Producers should keep in mind several important dates regarding the upcoming county committee elections. Producers can request, fill out and submit nomination forms up to Aug. 15, ’05. Ballots will be mailed to eligible voters by Nov. 4, ’05. The deadline to return ballots is Dec. 5, ’05. Elected committee members and alternates take office on Jan. 1, ’06. For more information about FSA county committees, visit a local USDAServiceCenter or refer to the above web site.



COT102 Gets Non-Regulated Status

USDA’s Animal & Plant Health Inspection Service (APHIS) has determined Syngenta’s Event COT102 is no longer a regulated article. Event COT102 cotton has been genetically engineered to contain an insecticidal Vip3A gene derived from Bacillus thuringiensis (Bt) and is the basis of Syngenta’s VipCot Bt cotton.

Because Syngenta’s Event COT102 cotton no longer is considered regulated, VipCot cottons based on Event COT102 and any progeny derived from hybrid crosses with other non-transformed cotton varieties can be used in traditional breeding programs.



Sales Rebound, Shipments Strong

Net export sales for the week ending July 14 were 281,200 bales (480-lb) bringing total ’04-05 sales to about 16.2 million. Total sales at the same point in the ’03-04 marketing year were about 15.0 million. Total new crop (’05-06) sales are 1.5 million bales.

Shipments for the week were 379,500 bales, bringing total exports to date to 12.6 million, compared with the 13.1 million at the comparable point in the ’03-04 marketing year. With less than one month remaining in the marketing year, weekly shipments must average roughly 350,000 bales to reach the USDA projection of 13.3 million.


Prices Effective July 22-28, 2005

Adjusted World Price, SLM 11/16

40.75 cents

*

Coarse Count Adjustment

0.00 cents

Current Step 2 Certificate Value

6.69 cents

Marketing Loan Gain Value

11.25 cents

Import Quotas Open

 0

Step 3 Quotas (480-lb. bales)

 0

ELS Payment Rate

74.79 cents

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

53.66 cents

Forward 3135 c.i.f. Northern Europe

55.56 cents

Coarse Count c.i.f. Northern Europe

53.62 cents

Current US c.i.f. Northern Europe

60.35 cents

Forward US c.i.f. Northern Europe

57.15 cents

 
2004-05 Weighted Marketing-Year Average Farm Price  
 
Year-to-Date (August-May)

42.80 cents

**

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

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