[Federal Register: December 17, 2002 (Volume 67, Number 242)]
[Rules and Regulations]
[Page 77147-77148]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr17de02-1]
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Rules and Regulations
Federal Register
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This section of the FEDERAL REGISTER contains regulatory documents
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[[Page 77147]]
DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 27
[Doc. CN-01-004]
RIN 0581-ACOO
Revision of Regulations for Determining Price Quotations for Spot
Cotton
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Final rule.
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SUMMARY: The Agricultural Marketing Service is amending the regulations
concerning designation of the spot markets used to calculate
differences for tenderable qualities delivered against cotton futures
contracts. The re-designated spot markets will better reflect the
trading value of tenderable qualities. Presently, regulations provide
for the Secretary of Agriculture to determine and designate spot
markets from which spot cotton price information can be collected.
Currently, there are seven designated markets that qualify under the
Cotton Futures Act requirements and five of those are designated to
determine differences for the settlement of futures contracts. The
Commodity Futures Trading Commission, in an effort to better reflect
market transparency, approved a request from the New York Board of
Trade that the spot markets used to calculate commercial differences in
Cotton Futures Exchange deliveries be re-designated. The requested
changes were as follows: replace the South Delta quote with the West
Texas quote; and replace the North Delta quote with the average of the
combined North and South Delta quotes.
Including West Texas quotes and combining and averaging North and
South Delta quotes provides a more accurate reflection of cotton that
is traded for cotton futures contracts.
EFFECTIVE DATE: April 1, 2003.
FOR FURTHER INFORMATION CONTACT: Norma McDill, Deputy Administrator,
Cotton Program, AMS, USDA, STOP 0224, 1400 Independence Avenue, SW.,
Washington, DC 20250-0224. Telephone (202) 720-2145, facsimile (202)
690-1718, or e-mail norma.mcdill@usda.gov.
SUPPLEMENTARY INFORMATION: A proposed rule detailing the revisions was
published in the Federal Register on July 23, 2002, (67 FR 48050). A
90-day comment period was provided for interested persons to respond to
the proposed rule. No comments were received and no changes have been
made in the provisions of the final rule.
Executive Order 12866
This rule was determined to be not significant for purposes of
Executive Order 12866, and, therefore, has not been reviewed by the
Office of Management and Budget (OMB).
Executive Order 12988
This final rule has been reviewed under Executive Order 12988,
Civil Justice Reform. It is not intended to have retroactive effect.
This final rule would not preempt any state or local laws, regulations,
or policies, unless they present an irreconcilable conflict with this
rule. There are no administrative procedures which must be exhausted
prior to any judicial challenge to the provisions of this rule.
Regulatory Flexibility Act
Pursuant to requirements set forth in the Regulatory Flexibility
Act (RFA) (5 U.S.C. 601 et seq.), AMS has considered the economic
impact of this action on small entities and has determined that its
implementation will not have a significant economic impact on a
substantial number of small entities.
The New York Cotton Future Market traders include the entire cotton
industry: farmers, merchants, and textile mill owners. There are an
estimated 3,000 traders. This final rule would affect all such traders.
The majority of the traders are small businesses under the criteria
established by the Small Business Administration. Amending the
regulations to change the designated spot markets for determining
tenderable differences will not significantly affect small businesses
as defined under the RFA because:
(1) The information gathered will be more reflective of the cotton
traded for cotton futures contracts and add more transparency to the
market;
(2) The competitive position or market access of small entities in
the cotton industry would not be affected;
(3) No new costs would be imposed on the affected industry.
Paperwork Reduction Act
In compliance with Office of Management and Budget (OMB)
regulations (5 CFR part 1320) which implement the Paperwork Reduction
Act (PRA) (44 U.S.C. 3501 et seq.) the information collection
requirements contained in the regulation to be amended have been
previously approved by OMB and were assigned control number 0581-0029
under the Paperwork Reduction Act (44 U.S.C. 3501 et seq.).
Background
The Secretary of Agriculture is authorized under the U.S. Cotton
Futures Act (7 U.S.C. 15b) to make such regulations as determined
necessary to carry out the provisions of the Act. The Act provides for
the designation of at least five bona fide spot markets from which spot
cotton price information can be collected. Presently, there are seven
such designated markets that qualify under the Cotton Futures Act
requirements. The seven designated markets are as follows:
Southeastern, North Delta, South Delta, East Texas and Oklahoma, West
Texas, Desert Southwest and San Joaquin Valley. For the purposes of
determining settlement of futures contracts five of the seven spot
markets are used. They are Southeastern, North Delta, South Delta, East
Texas and Oklahoma, and Desert Southwest. The Cotton Program of the
Agricultural Marketing Service provides market information from these
spot markets under the Cotton Statistics and Estimates Act (7 U.S.C.
473b) and the Agricultural Marketing Act of 1946 (7 U.S.C. 1622(g)).
The Commodity Futures Trading Commission, in an effort to better
reflect market transparency, approved a request from the New York Board
of Trade to change the spot markets used to calculate commercial
differences in
[[Page 77148]]
Cotton Futures Exchange deliveries. This final rule would change the
designation of the spot markets which are used daily to calculate price
differences for cotton futures contracts. The current designations were
published in the Federal Register on August 4, 1988 (53 FR 29327). As
previously stated, differences are quoted for those qualities of cotton
which are tenderable on active futures contracts in five designated
markets. These differences are averaged to obtain the differences
quoted for futures settlement.
This final rule would provide that differences would continue to be
quoted for those qualities of cotton which are tenderable on active
futures contracts in all of the five markets currently designated for
this purpose. However, the West Texas spot market would be added as a
bone fide spot market for the settlement of futures contracts, and the
North Delta and South Delta spot markets would be combined and averaged
together when used for this purpose of calculating differences of
tenderable qualities for the settlement of futures contracts. This
final rule would change the calculation of differences of tenderable
qualities for the settlement of futures contracts to be the average of
the differences of (1) the Southeastern spot market; (2) the East
Texas/Oklahoma spot market; (3) the West Texas spot market; (4) the
Desert Southwest spot market; and (5) the combination and averaging of
the North Delta and South Delta spot markets. The remaining designated
spot markets would not change. These modifications are expected to more
accurately reflect the trading value of tenderable cotton on futures
contracts and add more transparency in the market.
List of Subjects in 7 CFR Part 27
Commodity futures, cotton.
For the reasons set forth in the preamble, 7 CFR Part 27 is revised
as follows:
PART 27--[AMENDED]
1. The authority citation for 7 CFR Part 27 continues to read as
follows:
Authority: 7 U.S.C. 15b, 7 U.S.C. 4736, 7 U.S.C. 1622(g).
2. In Sec. 27.94, paragraph (a) is revised to read as follows:
Sec. 27.94 Spot markets for contract settlement purposes.
(a) For cotton delivered in settlement of any No. 2 contract on the
New York Cotton Exchange: Southeastern, North and South Delta, Eastern
Texas and Oklahoma, West Texas, and Desert Southwest.
* * * * *
Dated: December 10, 2002.
A.J. Yates,
Administrator, Agricultural Marketing Service.
[FR Doc. 02-31633 Filed 12-16-02; 8:45 am]
BILLING CODE 3410-02-P