Each change to delivery specifications and its implementation is discussed in detail below.
New Strength Requirement
The minimum strength requirement for Exchange deliveries is raised to 25 grams per tex ("gpt"), from the current 22 gpt. Existing stocks of certificated cotton with a gpt reading below 25 will no longer be deliverable after the March 2003 delivery.
As of January 21, 2003, there are 68,775 bales in certificated stocks that have a strength of less than 25 gpt. This information, which is updated weekly, can be found at www.nybot.com by clicking "Market Report," then "Cotton Stock By Warehouse," and then "Strength."
Age Discount
A new Age of Bale discount or penalty which will apply to all cotton delivered in a calendar year that is 2 or more years later than the cotton's year of growth. The year of growth is defined as the marketing season during which the cotton was grown. Cotton delivered in the 2nd calendar year after its year of growth shall carry a 2 cents per pound penalty; an additional 2 cents per pound penalty will apply for each additional calendar year after the 2nd. For example, cotton grown in the 2002/2003 marketing year would accrue a 2 cents per pound penalty beginning on January 1, 2004; a 4 cents per pound penalty beginning on January 1, 2005; and a 6 cents per pound penalty beginning on January 1, 2006, etc.
The new Age Penalty will apply to all deliveries commencing with the May 2003 delivery. This means that cotton grown in the current 2001/2002 season which is delivered against the May 2003 contract will carry a 2 cents per pound Age of Bale penalty, and cotton delivered against the May 2003 contract which was grown in the 2000/2001 season will carry a 4 cents per pound penalty.
The new Age Penalty is in addition to the current age penalty imposed which begins to accrue in the fourth month after the cotton was certificated.
The distribution of certificated stocks by year of growth can be found at www.nybot.com by clicking on "Market Report," then "Cotton Stock by Warehouse," and then "Year of Growth." This information is updated monthly.
Micronaire Differences
Establishes a new commercial difference for cotton in Exchange deliveries which has a micronaire reading of 4.8 to 4.9, if such a difference is calculated by the USDA. If no such difference is calculated by the USDA, the difference for Exchange deliveries shall be zero. (No such difference is currently calculated by the USDA.) This new commercial difference for 4.8 and 4.9 micronaire cotton will apply to all deliveries commencing with the May 2003 delivery.
Warehouse Bale Tag Coupon
Changes the definition of a Warehouse Bale Tag Coupon by specifying that an official Warehouse Bale Tag Coupon must be one that is issued by the warehouse. This definition becomes effective with the May 2003 delivery.
The New York Board of Trade (NYBOT) is the parent company of the Coffee, Sugar and Cocoa Exchange, Inc. (CSCE) and the New York Cotton Exchange (NYCE). Through its two exchanges and their subsidiaries and divisions, NYBOT offers an expanding range of agricultural, currency and index products. Information about the New York Board of Trade can be found at www.nybot.com.
