The supplemental assessment fee on imported cotton is set to increase by more than 11% as of October 16, 2023 through a new Final Rule issued by the U.S. Department of Agriculture’s Agricultural Marketing Service (AMS)
The rule will increase the supplemental assessment on imported cotton from $0.013215 per kilogram to $0.014691 per kilogram. This means that cotton importers will need to pay an additional $0.001476 per kilogram for every kilogram of cotton they import.
According to the Cotton Board Rules and Regulations, this increase is necessary to ensure that assessments collected on imported cotton and the cotton content of imported products will be the same as those paid on domestically produced cotton.
The Cotton Board uses the revenue from the supplemental assessment to fund research and promotion activities that benefit the US cotton industry. These activities include developing new cotton varieties, improving cotton production practices, and promoting US cotton to consumers and businesses around the world.
The change was calculated based on the increase in the average weighted price of Upland cotton received by U.S. farmers during the period January through December 2022, assuring both importers and domestic parties are assessed at the same rate.
In addition, AMS has amended the Import Assessment Table, which identifies the Harmonized Tariff Schedule (HTS) classification numbers that are subject to this assessment, the corresponding conversion factor, and the assessment rate for that HTS.
Cotton importers should review the updated HTS numbers to ensure that they are using the correct numbers when reporting their imports.
You can read the final rule here: Cotton Board Rules and Regulations: Adjusting Supplemental Assessment on Imports (2023 Amendments)
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The Agricultural Marketing Service (AMS) is amending the Cotton Board Rules and Regulations, increasing the value assigned to imported cotton to calculate supplemental assessments.
The assessed value of imported cotton will rise from $0.011136 per kg to $0.013215 per kg, which is an increase of an increase of $0.002079 per kg. This reflects an increase in the weighted average price of Upland cotton received by U.S. farmers in 2021.
The rule will come into effect on Nov. 28, 2022.
The AMS said it believes that the adjustment is necessary to “ensure that assessments collected on imported cotton and the cotton content of imported products are the same as those paid on domestically produced cotton.”
In 2021, producer assessments totaled $40.1 million and importer assessments totaled $44.2 million. According to the Cotton Board, should the volume of cotton products imported into the U.S. remain at the same level in 2022, one could expect an increase of assessments by approximately $8,268,674.
Each year, Section 1205.510(b)(2) of the Cotton Board Rules and Regulations uses the 12-month weighted average price received by U.S. farmers for Upland cotton to represent the value of imported cotton. This is so that the assessment on domestically produced cotton and the assessment on imported cotton and the cotton content of imported products is the same.
The first part of the assessment is based on the weight of cotton imported—levied at a rate of $1 per bale of cotton, which is equivalent to 500 pounds, or $1 per 226.8 kilograms of cotton. The second part of the import assessment is based on the value of imported cotton lint or the cotton contained in imported cotton products—levied at a rate of five-tenths of one percent of the value of domestically produced cotton.
You can view the complete Final Register Rule here.
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