China Includes Cotton on List to be Potentially Hit with High Tariffs

2018 April 4 –  Attached announcement regarding MOFCOM proposed list to levy retaliatory tariffs on Chinese imports  from the U.S. of agricultural and food products, including COTTON. 

 

 

2018-0404 China Responds to U S Section 301 Trade Action Announcement_4-4-2018

 

 

New Texas Law Requires Changes to Purchase Contracts

2017 JUL 11 – A NEW TEXAS LAW WILL APPLY TO ALL TEXAS COTTON PURCHASE CONTRACTS WITH PRODUCERS SIGNED ON OR AFTER  SEPT 1, 2017

A copy of HB 338 is attached. We are told this version was adopted by the legislature and signed by the Governor. Despite requests via the Senator from Lubbock and a search on line, the final signed copy is not yet available. However,  we are told this bill was not amended in the Senate or on the floor and that it is the final version of the law. When a signed copy is available we will verify that information.   Please consult your counsel concerning changes to your purchase contracts that will be needed.

Here are the highlights of HB338, and some comments:

HB 338 says that a contract to buy an agricultural product from a producer “must clearly and conspicuously state on its face” whether it is an acreage contract or a quantity contract.

Comment 1:

Comment 2:

  • HB338 does not say what the penalty will be if the contract does not comply, but one can be sure that a producer wishing to sell at a different price than the contract price will assert that a contract which does not comply is unenforceable.

Comment 3:

  •  If your acreage contract contains, as some do, a fixation provision that provides that that when a producer fixes the price he guarantees delivery of the number of bales fixed, we suggest that that such a contract requires special attention in drafting to make the change from an acreage contract to a quantity contract comply with the requirements of HB338.
  • HB338 says that a purchaser may not sue a producer for breach of an acreage contract “unless the producer knowingly fails to deliver all of an agricultural product grown on specified land as provided in the contract.”

Comment 4:

  • We believe the requirement of proof of “knowing” failure to deliver is an invitation to unscrupulous producers to shift the origin of cotton to their advantage, and then, if caught, assert that there was merely a clerical or other mistake. We suggest you and your attorney consider including tightened crop  progress reporting requirements.

 

Attachment

Upland Cotton Announcement

2017 Jul 7:  The Department of Agriculture’s Commodity Credit Corporation announced the adjusted world

price (AWP) for Strict Low Middling (SLM) 1-1/16 inch (leaf grade 4, micronaire 3.5-3.6 and

4.3-4.9, strength 26.0-28.9 grams per tex, length uniformity of 80.0-81.9 percent) upland cotton

(base quality), adjusted to U.S. quality and location, the fine count adjustment (FCA), the coarse

count adjustment (CCA), and the loan deficiency payment (LDP) rate that will be in effect from

12:01 a.m., Eastern Time, July 7, 2017, through midnight, Eastern Time, Thursday, July 13, 2017.

Please see attachment for complete details.

 

 

Shipping Performance of USDA Licensed Warehouses

2017 Jan 3 – Procedures for contacting USDA Kansas City Commodity Office regarding shipping performance of USDA Llicensed Warehouses

1. All submission of complaints on warehouse performance should be directed to: Mr. Timothy Mehl, email:timothy.mehl@kcc.usda.gov -direct line via phone: 816.926.6417.

2. KCCO does not provide any form for filing complaints.

3. Members are required to furnish via email to Mr. Mehl the following:

(a.) The load dates requested of the warehouse in question.
(b.) The loads date(s) given by the warehouse inclusive of documentation from the warehouse.
(c.) Copies of all documentation submitted to the warehouse for shipment.
(d.) It is important that members include both load date requested and load date received to complete this process
.
4. Members should ask KCCO when the shipping logs of the warehouse in question will be evaluated, as well as when you can expect to receive a decision. Members must follow up with KCCO once this process is set in motion.

We have received confirmation from ACSA members who have lodged complaints and followed through with the correct documentation and procedures which resulted in positive actions and outcomes. We cannot expect USDA to act upon just verbal complaints without the appropriate backup documentation.

Download PDF

ICAC Statement of 75th Plenary Meeting

The International Cotton Advisory Committee (ICAC) met in Islamabad, Pakistan, from October 30 to November 4, 2016 for its 75th Plenary Meeting since the establishment of the Committee in 1939. The meeting was attended by 378 persons, including representatives from 14 Members, 4 international organizations and 4 non-member countries.

Statement of 75th Plenary Meeting

DSG Update: Senate Ag Committee Votes on CFTC Commissioner Nominations

Thursday, 29 SEP:  Today, the Senate Ag Committee met off of the Senate floor to vote on the nominations of Christopher Brummer and Brian Quintenz to become CFTC Commissioners.  Both nominees were reported favorably by the Committee (unanimous voice vote) and will be placed on the Senate Executive Calendar for consideration by the full Senate, the timing of which is still unclear.

Background:  The vote follows the September 15 Senate Ag Committee hearing on these nominees (for your convenience, the Delta Strategy Group summary of the hearing is provided below).  The two were nominated in March, 2016 to fill the two vacant Commissioner positions at the CFTC. Brummer is currently a Georgetown law professor who was nominated to fill the Democratic seat, which remains vacant since the departure of Mark Wetjen.  Quintenz is currently a hedge fund manager who was nominated to fill the Republican seat previously held by Scott O’Malia.

Note:  The nominees must be confirmed by the full Senate prior to being officially in office.  The Senate plans to adjourn mid-day tomorrow until after the elections.  There is a limited chance the full Senate confirms the nominees by unanimous consent prior to adjournment, otherwise the only remaining possibility for confirmation this Congress will be in the “lame duck” session beginning after the election (currently scheduled to begin on November 14).

Please click on the below link for full report.

DSG Update: Senate Ag Committee Votes on CFTC Commissioner Nominations

Chairman Conaway Applauds Initiation of Enforcement Action Against China’s Agriculture Subsidies

TUESDAY, 13 SEPTEMBER 2016

Today, House Agriculture Committee Chairman K. Michael Conaway (R-TX) joined U.S. Trade Representative Michael Froman, U.S. Secretary of Agriculture Tom Vilsack and a bipartisan group of Members of Congress in announcing the U.S. has launched a new trade enforcement action against China at the World Trade Organization (WTO) as a result of China’s excessive government support for corn, rice, and wheat production.

CLICK ON THE LINK BELOW FOR PRESS RELEASE

2016-sep-13-conaway-applauds-enforcement-action-china-ag-subsidies

All U.S. cotton entering China must be fumigated for Zika virus

ACSA has learned recently of the requirement to fumigate all US cotton entering China due to Zika virus. Earlier this year several Latin American countries were required by the Chinese CIQ to fumigate their cotton entering the PRC.

Yuan Associates office has provided the information below from the Chinese Department of Supervision on Health Quarantine at AQSIQ with further details on the requirements for US cotton. More details may be made available and we will certainly circulate such when we obtain.

Here are our findings per your question:

  1. The U.S. cotton destined for China must be fumigated for Zika virus.

We have confirmed this requirement with Ms. PU, official from the Department of Supervision on Health Quarantine at AQSIQ.  On August 3rd,  AQSIQ updated the Zika infection list and added 7 more countries, including the U.S.  The other 6 countries were: Guinea-Bissau, Switzerland, Spain, Cuba, Guadeloupe, and Saint Barthélemy.  Ms. PU explained that as long as one area in the county has been detected for Zika virus, the shipments from the entire country should be fumigated before entering the Chinese border.  According to AQSIQ’s notice, there were 12 states in the U.S. have confirmed Zika infections. In practice, AQSIQ is responsible for updating the list for the infected countries and areas, while Local CIQs will apply the same fumigation requirements on incoming inspection for all shipments from the identified origins.

  1. Inspection requirements:  
  2. The fumigation mainly targets containers of goods.
  3. The shippers should obtain an official quarantine certificate after fumigation at the origin, otherwise China will apply the fumigation at a local port.  Shippers could either select fumigation methods that kill general insects including mosquitos, or specific types of fumigation designed to target mosquitos. 
  4. If shippers will provide an official certificate, it should prove that mosquito was killed through the fumigation at origin. 
  5. If shippers want to conduct the fumigation upon arrival,  they will receive a quarantine notice from the local CIQ. Then, professional agencies/ institutions at the local port will apply the fumigation and issue the certificate. The time and financial costs of fumigation depend on each local port. Normally, it takes at least one working day.

Please feel free to let us know if you have any further questions.