ANNOUNCEMENT 02 Nov 2015In November 2015, the government of the United States of America announced a change in import formalities.
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In response to a request from the U.S. cotton industry and the International Cotton Association (ICA) the Intercontinental Exchange (ICE) offers a World Cotton futures contract to better manage price risk in the global cotton market.
ICE is a U.S. network of exchanges and clearing houses for financial and commodity markets, owing and operating 23 regulated exchanges and marketplaces. In response, ICE began offering World Cotton futures contracts on November 2, 2015. With this contract offering, cotton grown outside the United States is allowed to participate in a U.S. commodity exchange for the first time. It is to be distinguished from the existing futures contracts that price the delivery of U.S. cotton only for U.S. delivery points the new World Cotton futures contract prices the delivery of cotton regardless of growth for U.S. and foreign delivery points.
Cotton grown in the United States, Australia, Brazil, India, and the west African countries of Benin, Burkina Faso, Cameroon, Ivory Coast and Mali will be eligible for deliveries against the new World Cotton futures contract. The Agricultural Marketing Service of the U.S. Department of Agriculture supported this development by publishing in the Federal Register (Volume 81, Number 27) on February 10, 2016 a direct final rule that is intended to facilitate the participation of foreign-growth cotton in the World Cotton futures contract. It provides inter alia for the quality parameters that this cotton must meet.