§7937 Special Marketing Loan Provisions for Upland Cotton

Summary

Creates two programs that let more upland cotton be imported under low tariffs when U.S. prices get high. From May 13, 2002, through July 31, 2008, the Secretary checks prices and can open a special import quota if foreign-delivered U.S. cotton is more than 1.25 cents per pound higher than the world price over a 4-week period. If the Secretary estimates the season-ending U.S. stocks-to-use ratio is below 16 percent, the U.S. price quote is used without adjustment. Until July 31, 2006, the Secretary ignores the 1.25-cent cutoff when doing the price check. A special quota equals one week’s mill consumption based on the most recent 3 months. Cotton under that quota must be bought within 90 days of the announcement and entered into the U.S. within 180 days. Total special-quota imports in a marketing year cannot exceed the equivalent of 5 weeks’ consumption. The quota gets in-quota tariff treatment under certain customs rules. Special quotas may overlap other special quotas, but not a limited global quota. A limited global import quota starts when a month’s base-quality upland cotton price in designated markets is over 130 percent of the 36-month average. That quota is 21 days of mill consumption (or, if one ran in the past 12 months, the smaller of 21 days or the amount needed to raise supply to 130 percent of demand). Cotton entered under this quota may be admitted during the 90 days after it is set. Definitions: “special import quota” and “limited global import quota” — imports not subject to the over-quota tariff; “supply” — carryover, current production, and imports (adjusted to 480‑pound bales); “demand” — recent 3‑month mill use and either 6‑year average exports or current exports plus outstanding export sales.