§7937 Special Marketing Loan Provisions for Upland Cotton

Summary

The President must run special cotton import programs from May 13, 2002, through July 31, 2008. A special import quota starts when the 4-week Friday–Thursday average price for the lowest-priced U.S. Middling (M) 13/32‑inch cotton delivered C.I.F. Northern Europe is more than 1.25 cents per pound above the Northern Europe price. If the Secretary expects the season‑ending U.S. stocks‑to‑use ratio to be under 16 percent for a month, the Secretary will not adjust the U.S. price for that test. From now through July 31, 2006, the 1.25 cent threshold is ignored. Each special quota equals one week’s domestic mill consumption based on the seasonally adjusted average of the last three months. Cotton under the quota must be purchased within 90 days of the announcement and entered into the U.S. within 180 days. A special import quota means imports that are not subject to the higher, over‑quota tariff. A marketing‑year total under these special quotas cannot exceed the equivalent of five weeks’ consumption. A limited global import quota is set when the month’s average price of a base quality of upland cotton is more than 130 percent of its average price over the prior 36 months. That quota equals 21 days of domestic mill consumption (seasonally adjusted average of the most recent three months). If a quota was used in the past 12 months, the next quota is the smaller of 21 days or the amount needed to raise supply to 130 percent of demand. Supply means beginning carryover plus current production plus imports to the latest date. Demand means the annualized rate of recent domestic mill use plus the larger of average exports over the prior 6 years or current exports plus outstanding export sales. Cotton under this quota is also exempt from the over‑quota tariff and may be entered within 90 days of the quota being set. Quotas under the two programs may not overlap.