March 14, 2002
Contact:
Marjory Walker
(901) 274-9030
MEMPHIS, TN (Special) -- The Brazilian government’s consideration of leveling countervailing or anti-dumping duties on U.S. cotton is "disappointing and completely inappropriate," said National Cotton Council (NCC) Chairman Kenneth Hood.
"The U.S. cotton industry is suffering from the very same low international prices cited by the Brazilians – and U.S. producers are reacting accordingly," the Gunnison, MS, producer and ginner said. "Estimates of U.S. plantings for the 2002 crop indicate the U.S. will reduce 2002 cotton plantings by 1 million bales from last year.
"It also is surprising that Brazil would attempt to target the United States, given that U.S. cotton exports to Brazil are virtually non-existent."
The U.S. shipped 15,000 (480-lb.) bales of cotton to Brazil last year, accounting for 2 percent of the country’s cotton imports. Since the current marketing year began Aug. 1, the U.S. has exported about 18,400 bales to Brazil from the 2001 crop. The U.S. is expected to ship a total of 35,000 bales to Brazil during the current crop year, less than 4% of the 1.1 million bales Brazil is expected to import.
"It is surprising indeed for any country to argue that such a minute amount of imports has a damaging impact on local production," Hood said.
"It also is disappointing that some Brazilian growers would take the position that only U.S. growers shoulder the responsibility for any world production adjustment. All other major cotton-growing countries maintained or expanded acreage in 2001, resulting in a record world cotton crop at the same time that demand for cotton has stagnated because of a worldwide economic slowdown."
NCC President and CEO Gaylon Booker said, "Focusing solely on U.S. producers and agricultural programs misses other key ingredients determining world cotton prices. For the past 18 months, most Asian currencies have decreased in value and are now more depressed than during the financial crisis of 1998. The result is soaring shipments of textile and apparel products from Asia and depressed prices at the retail level.
"The margins of the world’s yarn spinners and textile and apparel manufacturers have vanished. This has placed added pressure on raw cotton prices, in addition to the pressure from large stocks. Furthermore, the increase in shipments of textile products from Asia has added to problems of sustaining domestic mill use in other regions of the world."
The U.S. now imports the equivalent of 16.1 million bales of cotton annually in the form of cotton textile and apparel products, meaning that imports supply more than 75 percent of those segments of the U.S. retail market. U.S. mill use of cotton has fallen from 11.4 million bales in 1997 to 7.3 million bales for the current crop year.
Dr. Mark Lange, NCC’s Vice President for Policy Analysis and Program Coordination, said, "The cotton production world is replete with subsidies. Our economists estimate that at least 80 percent of the world’s production takes place under some subsidy arrangement or non-market intervention.
"The National Cotton Council hopes the Brazilian government will take a very close look at this request for intervention by some Brazilian growers. The U.S. cotton program is operated consistently with U.S. trade obligations. U.S. cotton exports to Brazil have been very small the last two years, and U.S. cotton acreage is predicted to decline significantly in 2002. Low world cotton prices have arisen from a wide array of factors that extend well beyond trade in raw cotton and the production decisions of U.S. cotton growers."
"The U.S. cotton industry is suffering from the very same low international prices cited by the Brazilians – and U.S. producers are reacting accordingly," the Gunnison, MS, producer and ginner said. "Estimates of U.S. plantings for the 2002 crop indicate the U.S. will reduce 2002 cotton plantings by 1 million bales from last year.
"It also is surprising that Brazil would attempt to target the United States, given that U.S. cotton exports to Brazil are virtually non-existent."
The U.S. shipped 15,000 (480-lb.) bales of cotton to Brazil last year, accounting for 2 percent of the country’s cotton imports. Since the current marketing year began Aug. 1, the U.S. has exported about 18,400 bales to Brazil from the 2001 crop. The U.S. is expected to ship a total of 35,000 bales to Brazil during the current crop year, less than 4% of the 1.1 million bales Brazil is expected to import.
"It is surprising indeed for any country to argue that such a minute amount of imports has a damaging impact on local production," Hood said.
"It also is disappointing that some Brazilian growers would take the position that only U.S. growers shoulder the responsibility for any world production adjustment. All other major cotton-growing countries maintained or expanded acreage in 2001, resulting in a record world cotton crop at the same time that demand for cotton has stagnated because of a worldwide economic slowdown."
NCC President and CEO Gaylon Booker said, "Focusing solely on U.S. producers and agricultural programs misses other key ingredients determining world cotton prices. For the past 18 months, most Asian currencies have decreased in value and are now more depressed than during the financial crisis of 1998. The result is soaring shipments of textile and apparel products from Asia and depressed prices at the retail level.
"The margins of the world’s yarn spinners and textile and apparel manufacturers have vanished. This has placed added pressure on raw cotton prices, in addition to the pressure from large stocks. Furthermore, the increase in shipments of textile products from Asia has added to problems of sustaining domestic mill use in other regions of the world."
The U.S. now imports the equivalent of 16.1 million bales of cotton annually in the form of cotton textile and apparel products, meaning that imports supply more than 75 percent of those segments of the U.S. retail market. U.S. mill use of cotton has fallen from 11.4 million bales in 1997 to 7.3 million bales for the current crop year.
Dr. Mark Lange, NCC’s Vice President for Policy Analysis and Program Coordination, said, "The cotton production world is replete with subsidies. Our economists estimate that at least 80 percent of the world’s production takes place under some subsidy arrangement or non-market intervention.
"The National Cotton Council hopes the Brazilian government will take a very close look at this request for intervention by some Brazilian growers. The U.S. cotton program is operated consistently with U.S. trade obligations. U.S. cotton exports to Brazil have been very small the last two years, and U.S. cotton acreage is predicted to decline significantly in 2002. Low world cotton prices have arisen from a wide array of factors that extend well beyond trade in raw cotton and the production decisions of U.S. cotton growers."
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