United States Cotton Futures Act Amendments
Floor Speech
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Mr. AUSTIN SCOTT of Georgia. Mr. Speaker, I yield myself such time as I may consume.
I rise in strong support of H.R. 2620. This bill would amend the United States Cotton Futures Act to allow for the creation of a world cotton contract listed on the United States exchange.
Current law, which requires sampling and classing by the USDA of every bale of cotton tendered under contracts listed on a U.S. exchange reflects an antiquated picture of the global cotton market. Some market participants need to hedge price fluctuations in foreign markets, and the current law limits their ability to do so. We need to update our law to reflect the modern nature of this marketplace.
H.R. 2620 accomplishes this by providing an option for cotton produced and delivered in foreign markets to be classed by rating facilities closer to the point of delivery rather than by the United States Department of Agriculture. It makes no changes to the treatment of domestically produced and delivered cotton.
This legislation will allow any willing exchange to meet industry demand to design a world cotton contract. For example, ICE Futures U.S., which has already worked with market participants, has publicly announced their intention and preference to list a world cotton contract side by side with the domestically focused Cotton No. 2 contract they already list.
H.R. 2620 allows for an important new contract for cotton hedging to be developed, which would be beneficial to commercial hedgers. However, it is important specifically to me and to others to note, it would not disrupt the industry's benchmark hedging contract, the No. 2 contract, which is relied upon by U.S. cotton producers in my district and around the country.
Before I close, I would like to thank Chairman Conaway both for his continued leadership on the Agriculture Committee and his efforts on this legislation. Additionally, I want to thank Ranking Member David Scott for working with me on this issue over the last few months. And I would like to acknowledge Lynn Westmoreland's work in this as well. He was instrumental in advancing this issue.
I urge my colleagues to join me in support of H.R. 2620.
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Mr. AUSTIN SCOTT of Georgia. Mr. Speaker, as my colleague, Mr. Scott, and I have said, this is simply a necessary, minor change. I would just ask all Members to support passage of H.R. 2620.
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