In response to demands by local textile manufacturers, the Minister of Industry and External Trade Hatem Saleh last week announced the lifting of a ban that had been imposed on the import of short and medium staple cotton. The import ban was originally imposed in October 2011 following protests by farmers complaining that imported cotton at low prices was negatively affecting the marketing of local produce. Local spinning mills prefer to use imported short and medium staple cotton because it is cheaper, selling at an average of LE600 to LE700 per qantar (157.7kg). Egypt's high-quality long staple cotton is priced at LE1,000 per qantar. As a result, stocks of locally produced cotton have tended to accumulate, and since farmers have been obliged to sell their harvests at lower prices to compete with international prices, they have been reluctant to grow cotton. To overcome the marketing problems of local cotton, the government had banned cotton imports temporarily in an effort to force spinners to use domestic supplies. It decided to end the import ban when most of the domestic cotton crop had been purchased. Hassan Eshra, chairman of the Spinning and Weaving Exports Council, told Al-Ahram Weekly that the decision was important to local textile industries since there was not enough locally produced short and medium staple cotton to enable factories to cover domestic consumption as well as their export commitments. “Banning cotton imports led to a shortage of cotton, and factories were about to come to a standstill as a result,” Eshra said. But while the lifting of the ban was welcomed by manufacturers, they also had reservations. Mohamed Kassem, chairman of the Export Council for Readymade Garments, said that lifting the ban was a good thing but that it had come too late. “Had the ban been lifted some months ago, we would have been able to buy our needs of cotton at lower prices,” he said. Kassem explained that at the beginning of the harvest season international cotton prices were at their minimum levels, but prices increased in the middle of the season when supplies were reduced. He lamented the fact that the local textile industry was always “paying the price” of government measures intended to protect Egyptian cotton. Banning the import of short and medium cotton staples was not the solution for marketing Egyptian cotton, he said. “As a result of its use in local textile production, Egypt's long staple cotton is losing its advantage and value,” Kassem said, adding that it would be better if it were used in high-end export products. In addition, the use of long staple cotton led to higher production costs, making the end products more expensive, he said. Mohamed Abdel-Moneim, former manager of the Cotton Research Institute, agreed that importing certain staples of cotton was needed because the amounts of short and medium staple cotton being planted in Egypt were very modest. The short and medium staple, or Giza 80 and Giza 90, represented 10 per cent of production and was grown in Upper Egypt, he said, adding that the Cotton Research Institute had shown that the cultivation of short and medium staple cotton was neither suitable nor profitable in Egypt, unlike long staple cotton. Egypt's production of long staple puts the country 28th in the list of worldwide producers, he said, with the country's annual production standing at between 500,000 and 750,000 tonnes. Egypt produces three different varieties of cotton — extra long staple, long staple and medium and short staple. The long staple variety, named Giza 86, represents 70 per cent of production and is grown in the Nile Delta. Egypt's total annual production of cotton stands at between 120,000 and 250,000 tonnes and represents one per cent of international cotton production, which is estimated at 27 million tonnes. The country's cotton harvest has also been declining. In 2012, it stood at 2.5 million qantars, compared to 3.8 million qantars in 2011, according to figures from the Alexandria Cotton Exporters Association. The production of short and medium staple cotton, known as Giza 80 and Giza 90, also fell from 150,000 tonnes 10 years ago to 34,000 tonnes today. According to Abdel-Moneim, the reason is mismanagement, and he suggested that the government should do more to support cotton farmers. Cotton should be given an indicative price set before the cultivation season like for sugar cane, he said, in order to encourage farmers to grow it. If the international price was higher than the indicative price, farmers would make higher profits, but if it was less the government would step in to provide financial support to buy cotton at the indicative price, he said. Abdel-Moneim said that it was important to set a clear strategy for cotton that would promote Egypt's reputation worldwide, as well as benefit all parties, including producers, traders, and exporters working in the sector. “The government should not export raw cotton,” he added. “Instead, it should always add value to it by spinning.”
