THE MEMPHIS/EASTERN Middling (Memphis) quote was dropped from the A Index on Nov. 20. The A Index is a proxy for the world price of cotton. Each business day, Cotlook, Ltd. ranks various growths of cotton from different countries. The lowest five quotations are averaged to derive the Cotlook A Index. The Memphis quote had been included in the index since the beginning of the 2001 crop year.

Prior to its elimination, the Memphis quote had been listed as nominal for 25 consecutive days. The elimination of the Memphis quote seems to reflect the concerns of many merchants regarding the availability of Middling 1 3/32 cotton from the Memphis territory. The concerns are largely due to the extremely wet weather during much of the harvest season.

Because the Memphis quote has been dropped, the California/Arizona Middling quote will now be used to determine Step 2 payments. On average, the California/Arizona Middling quote tends to be higher than the Memphis quote, resulting in a higher Step 2 payment.