[Federal Register Volume 67, Number 242 (Tuesday, December 17, 2002)]
[Rules and Regulations]
[Pages 77147-77148]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-31633]



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 Rules and Regulations
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  Federal Register / Vol. 67, No. 242 / Tuesday, December 17, 2002 / 
Rules and Regulations  

[[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.

-----------------------------------------------------------------------

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 [email protected].

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