While Brazilian officials were in Geneva arguing that U.S. subsidies were depressing world cotton prices, the Brazilian government was busy selling government-held cotton stocks on the Brazilian market in order to lower internal Brazilian cotton prices according to USDA reports.
“The actions of Brazil's own government in April and May of 2007, when it sold nearly two-thirds of its government held cotton stocks to drive down prices are clearly incompatible with Brazil's contemporaneous arguments that the United States was suppressing world cotton prices,” National Cotton Council Consultant Bill Gillon said at a joint meeting of the American Cotton Producers and Cotton Foundation.
“The Brazilian government was arguing (and the WTO Panel apparently agreed) that the U.S. cotton program was causing price suppression in the world market, even though the Brazilian government was taking action to drive down domestic cotton prices. Brazil's words to the WTO were blatantly inconsistent with Brazil's own actions at the time.”
Gillon reiterated earlier statements by the NCC that there is little proof the U.S. cotton program currently is causing price suppression in the world cotton market.
“Since the United States eliminated its step 2 program, U.S. cotton exports declined significantly, U.S. acreage dropped 28 percent and production is expected to decline by 20 percent or more for 2007,” Gillon noted. “Cotton production and exports are dramatically up in India and Brazil's production has also risen since the first Panel decision and world cotton prices are up.”
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