Louis Dreyfus Commodities, the world’s No. With mills buying on a just-in-time basis, stocks running low and prices volatile, dealers fear they will get caught short and end up paying more for alternative cotton supplies if their bales are stuck in queues. Several buyers said Louisiana, which is near some of the country’s major mills and shipping hubs, has been a hot spot for logjams this year. Capacity at warehouse sites can range from 1,000 bales to more than 500,000 bales. It is not clear just how much fiber is stuck in queues, and market sources would not identify sheds with the biggest wait times. Department of Agriculture, which oversees more than 350 warehouses across the country, is preparing to step up monitoring next month in response to industry pressure, but critics say more action is needed to speed the cotton to market. “We are trying to find a way either through regulations or through market channels to reward warehouses that provide good service and provide disincentives for warehouses that might sit on the cotton simply for revenue,” said association executive director Andrew Jordan. As long as warehouses stick to that minimum they are not breaking any rules. That’s because the load-out rate stipulates only the minimum number of bales that needs to be shipped. Those who own the sheds - a mix of independent warehouse operators, farmer cooperatives, and merchants - say they are simply operating within government-mandated load-out rates.īut the Cotton Growers Warehouse Association, which represents warehouse operations affiliated with farmer cooperatives, acknowledged the practice of stalling shipments to generate revenue was still a possibility. 2 trader, are calling for measures that would force warehouse operators to release the cotton more quickly. merchants are missing out on sales because it can take months to get shipments to buyers,” said Kevin McDermott, vice president at Jess Smith & Sons Cotton, a mid-sized merchant in Bakersfield, California.įrustrated merchants such as Singapore’s Olam International Ltd, the world’s No. The logjams, which have not been widely reported, are among the worst seen since the existing minimum load-out rate was introduced in 2004, traders said. The issue, which has dogged the market on and off for years, returned with a vengeance this year at sheds from Lubbock, Texas, to Memphis, Tennessee. But some warehouse operators are shipping it out at the slowest possible rate in order to keep charging storage fees, 12 traders, buyers, and warehouse operators said.

Traders that own the stockpiled cotton have raced to remove their bales this year in order to cash in on higher prices as inventories shrink to their lowest seasonal level in over seven years.

Farm worker Jose Luna holds a bundle of harvested cotton at Baxley & Baxley Farms in Minturn, South Carolina in this Novemfile photo.

Valentina by Kevin McDermott