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Egypt's 'white gold' cotton losing its luster
Published in Daily News Egypt on 09 - 10 - 2009

INSHAS: Ahmed Mansour, like many farmers, has long thrived on Egypt s famed white gold cotton; but with prices uncertain and production costs soaring he is more and more inclined to go green.
Fruit and vegetables make money, said Mansour, who owns about a hectare (2.5 acres) of land in Inshas, a village northwest of Cairo.
Until last year he devoted his farming efforts exclusively to producing cotton. Now only half his lands are cotton fields; the rest are planted with rice and a smattering of other crops, including vegetables.
I will have to stop growing cotton altogether if prices fall further. Costs are high and harvests are smaller, he said.
The Egyptian cotton crop has shrunk to its lowest total in more than a century and producers are demanding a return to subsidies like those still paid in some other countries.
The 100 percent Egyptian cotton label conquered the world after Egypt s modern founder Mohamed Ali introduced the crop to Egypt in 1820.
Ever since then Egypt s superior quality, long and extra long staple cotton has generated strong demand from luxury designers and up-market establishments.
But due mainly to the liberalization of cotton trade and the global financial crisis the bubble has burst and the demand for Egyptian cotton has slowed, leading to less of the crop being planted.
The International Cotton Advisory Committee (ICAC) says industrial usage of cotton declined by 12 percent globally in 2008-2009.
This year s harvest in Egypt was 54 percent less than that of a year ago.
Figures from the Ministry of Trade and Industry show production for the latest 2008-2009 season reached 105,000 tons, the lowest since before 1900, when output was already at 272,000 tons according to experts.
Land allocated to plant Egypt s white gold has shrunk in recent years from 275,000 hectares in 2007 to around 158,000 hectares in 2008.
It used to be that we planted cotton everywhere, but because revenues are not guaranteed we have decided to grow other crops on part of the land, said Mansour.
The cost of growing the crop is high because it is labor intensive, pesticides are expensive and finally the (selling) price at the end of the season is not secure, he said.
Despite the fame of its fibers, Egypt is a small grower compared to China which produces eight million tons annually, India whose output stands at 5.0 million tons or the United States with its 2.8 million tons.
The price of Egyptian cotton has dropped only slightly from $3,575 a ton last season to $3,350 a ton in 2008-2009. Farmers nonetheless are turning away from white gold because prices are no longer guaranteed.
According to experts, the decline of cotton production began in 2004 with the total liberalization of cotton trading under agreements signed between Egypt and the World Trade Organization.
Before liberalization, the government fixed cotton prices at the beginning of the season, bought it from farmers and then sold it abroad, said Mohamed Abdel-Salam, of the state-run Cotton Research Institute.
This encouraged farmers to plant large surfaces of cotton, without worrying about drops in market prices, he said.
Abdel-Salam, whose research center is run by the agriculture ministry, urged the government to save the country s white gold by taking interventionist measures, as is the case in Greece, Turkey and the United States.
The United States, despite their commitments to the World Trade Organization, still subsidize cotton production, like certain countries in the European Union such as Greece, he said.
He also cited Turkey which took in 1980 a political decision to support cotton and the textile industry.
It is in Egypt s interest to support cotton, said Abdel-Salam, voicing hope that the Egyptian authorities will take what he calls a political decision before it is too late.


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