Frequently Asked Questions

How does ECOM offer a GMP over the loan Value?

The ECOM Cotton Division trades greater than two million bales each year around the globe. ECOM has access to excellent market intelliegence around the world. ECOM prior to setting the GMP levels, anaylsis market behavior, possible influences throughout the marketing year and trades significant option and futures strategies to be able to guarantee these values.

How many new members do you allow in to the USCGA every year?

There is no set amount. However the USCGA is proud of the membership we have today. A majority of the cotton the USCGA handles today comes from Texas. Less than twenty five percent is generated from the Delta and Southeast. The USCGA will be focusing on building our relationships with the Delta and Southeast members and our objective is to build our marketshare in both areas. The USCGA is selective in what gins/members we accept into the pool.

What products are available through the USCGA?

ECOM offers a Guaranteed Minimum Price - Grower is guaranteed a minimum price in local terms over the full loan value. The GMP gives the grower and lenders a foundation. Growers may still also enjoy upside price potential. ECOM also offers a Performance Pool- which the full loan value is guaranteed, however this pool has the potential to return to the grower more under certain market conditions.

Who are the US Cotton Growers Association?

A CMA (Commodity Marketing Association)registered with the U.S Government. The Association was established in West Texas in 1998 and has grown to cover five other states, with over 800 members. The USCGA is a non profit organization with no monies being retained. All monies are paid out every year to the members. The USCGA has a local board consisting of six board members, three are located in West Texas, one in South Texas, one in Missouri and one in Tennessee. All marketing of the USCGA is managed and controlled by ECOM USA Inc.

Why a CMA?

Allows the grower to concentrate on what he knows best and that is growing the cotton. It gives the grower access to market intelligence and global influences through dealing with ECOM. A CMA allows the grower to participate in government programs and growers have no need to finance hedging strategies; ECOM finances all hedging for the USCGA Pool.

What are territorial charges?

Territorial charges are normal warehouse charges incurred from inbound to outbound. They also represent charges incurred during the process of putting cotton in the loan. These charges cover: receiving into warehouse, one month storage, IDI/ EWR fee, gin commission (if applicable), and cost of coop.

What is a GMP?

A GMP is a Guaranteed Minimum Price. ECOM guarantees in most cases an equity over the loan value. As a pool, members of the USCGA can offset all yield and price risk to ECOM. ECOM will guarantee to pay the price that they have nominated for each pool. ECOM controls all hedging and sales for the USCGA.