US cotton likely to be hit by Turkish decision on imposing duty

Turkey is imposing the U.S. cotton exporters with a three percent duty as retaliation against a U.S. investigation into Turkish steel exports. The final decision of the Turkish government on its anti-dumping investigation of U.S. cotton was released.

Based on assertions that U.S. cotton was dumped into Turkey injuring the domestic fiber market — which the National Cotton Council (NCC) steadfastly challenged — a three percent CIF (cost, insurance and freight) duty has been imposed on all U.S. cotton fiber imports into Turkey, effective immediately.

House Agriculture Committee Chairman K. Michael Conaway (R-TX) issued the following statement regarding the Turkish announcement that American cotton growers remain under assault, and the problems just keep coming. .Last week, China announced it will start selling off government-owned stockpiles, a result of the reckless policy that has depressed world cotton prices and that continues to hang over the market.

NCC Chairman Shane Stephens said the investigation, which was initiated in October 2014, was clearly in response to several U.S. trade investigations of Turkish steel imports. In an unusual move, he noted that the Turkish government self-initiated the investigation without any showing of special circumstances as is required under World Trade Organization (WTO) rules. The investigation was blatant retaliation, violated WTO procedure, and was anything but transparent. The findings are baseless and the duties should be dropped immediately.

According to Stephens, the investigation itself lacked transparency regarding information used to justify the investigation. In fact, data used in support of a finding of injury to the Turkish domestic cotton market ignored established facts to the contrary.

The Council submitted ample evidence showing that Turkey’s cotton market has experienced price declines due to the same factors affecting cotton markets worldwide. He said, for example, government policies in developing countries and competition from man-made fibers have contributed to stagnant global demand, increased stocks and lower cotton prices.

He added that, the import duties only compound the difficult economic climate facing U.S. cotton growers and merchandisers. The Council will continue to actively oppose the imposition of duties and is exploring ways to reverse the decision, such as WTO mechanisms and the Turkish judicial system.

Turkey is the second largest export market for U.S. cotton with shipments ranging between 1.5 and 2.0 million bales. The duties automatically put U.S. cotton at a competitive disadvantage to cotton produced in other countries, thus seriously jeopardizing business with Turkish mills.