A government decision to protect local farmers by banning cotton imports has the garments industry up in arms, Ahmed Kotb reports Egypt's Minister of Industry and Foreign Trade Mahmoud Eissa declared last Thursday that raw cotton imports into the country will be banned until the local harvest is all sold out. The decision responded to several requests by Egyptian farmers, complaining about difficulties selling this year's cotton harvest, following a drop in international prices. Eissa has made it clear that the decision is temporary and that the ban will be lifted after all locally produced stock is sold. Egypt produced 6.3 million kantars of raw cotton this year, two million of which are ready for exporting deals. The first response to the announcement came from Yehia Zananiri, head of the garments manufacturers association, who strongly opposes the ban. "This means that factories will be obliged to buy locally produced cotton at higher prices," he told Al-Ahram Weekly. "It is not our problem that the Ministry of Agriculture decided to cultivate more than it could sell." He added that, as a result of the ban, prices of yarn delivered to factories will be higher. Mahmoud El-Daour, head of the garments' division at the Cairo Chamber of Commerce (CCC), told the Weekly that the Ministry of Industry and Foreign Trade's decision bans raw cotton imports alone, which means that garment factories can import yarn whenever they wish to. In reality, however, "the announcement did not make it clear whether the ban will be imposed on raw cotton only. That's why the industry was shocked by the decision at first," El-Daour noted, adding that there will be no impact on garments prices in the short or long term. Regardless of the questionable quality of imported raw cotton, prices are cheaper than local produce, meaning that spinning and ginning factories will have to pay more to get raw cotton. In response, the Ministry of Agriculture requested from the cabinet the allocation of LE220 million to subsidise local spinning factories with LE90 for upper level raw cotton and LE100 for Giza 86 -- the two types of raw cotton available on the market. The first type costs LE1,000 per kantar, while the second costs LE1,200. Imported raw cotton is known to be sold at around LE100 to LE200 less than local cotton. Minister of Agriculture Salah Youssef was quoted on Sunday as saying that he recommends that the Ministry of Industry and Foreign Trade should impose a protection fee on imported yarn as well, in order to protect local yarn from "unfair competition". El-Daour says that he expects the ban will be lifted in four to six months, and stressed that the decision to ban cotton imports will be of great benefit because it will encourage farmers to cultivate more cotton next season and "gradually restore the former reign of Egyptian cotton".
