Cargill wins arbitration case filed
By Chris Prentice
NEW YORK, Feb 7 (Reuters) Cargill cheap canada goose uk Inc has won an arbitration case filed by an Alabama cotton cooperative that accused the global commodities trader of breach of a contract in 2011, according to a ruling.
In October last year, the Autauga Quality Cotton Association alleged canada goose uk shop that Cargill cost Canada Goose Jackets its member UK Canada Goose farmers an estimated $35 million of hedging related losses in 2011 and filed a complaint with the Memphis Cotton Exchange.
The exchange determined that Cargill was not responsible for the loss in value of the farmers cotton uk canada goose outlet and was not in breach of the terms of the contract, its board said in a Canada Goose Outlet Jan. 28 ruling posted on Autauga website.
The co op was disappointed and vehemently disagree with their decision, Jeff Thompson, Autauga representative of the southeast/mid south, said in a statement on the organization website.
According to the original complaint, Cargill, one of a number of large commodities merchants, was responsible for finding cotton buyers for a small group canada goose uk outlet of farmers represented by the group as well as helping them hedge exposure to price volatility canada goose clearance sale in cheap Canada Goose the futures market.
But Cargill prematurely removed hedges without the farmers consent, leaving Autauga cotton unprotected against price gyrations. The removal of those hedges cost the co op members buy canada goose jacket about $35 million in losses for 164,000 bales of cotton, the group said.
the comments on the (Autauga website, the arbitrators found that Cargill did not act arbitrarily or engage in any canadian goose jacket conduct for which it could or should be held accountable. The unanimous award speaks for itself, Mark canada goose uk black friday Klein, a Cargill spokesman, said on Thursday in an canada goose clearance emailed statement.
In canada goose store September 2011, Autauga farmers received 77 cents a canada goose coats on sale pound Canada Goose Coats On Sale for their cotton, instead of the $1.10 to $1.20 they had been canada goose factory sale expecting, thanks to the dropped Canada Goose Online hedges, the organization previously said. The average cost of production canada goose that year was about 85 cents a buy canada goose jacket cheap pound, according to Autauga.
Cargill replaced short futures with cash sales on Canada Goose Parka behalf salecanadagooseoutlets canada goose black friday sale of the farmers, believing that China plans to Canada Goose online build up its state cotton reserves would turn Autauga futures hedges against them, according to the canada goose coats arbitrators determination.
In March 2011, China announced plans to build its reserves of the fiber. Those reserves now stand at roughly half of global inventories.
While the trading firm decision was a good one, Cargill acted in Autauga best interest based on information known at the time, the three arbiters on the exchange committee said.
The International Cotton Association, a UK based trade association that oversees international trade disputes, said last month it dealt with a record 247 applications for arbitration in 2012. Canada Goose sale That was up from a previous all time high of 242 a year uk canada goose earlier.