CAIRO - A crisis may be in the making when the new cotton crop is not marketed. Trading and cotton manufacturing companies have abstained from buying the new crop or offering reasonable prices. Sources in the cotton market called on the Government to pay the difference, so farmers would be motivated to keep on growing cotton in the future. The head of the Holding Company of Cotton, Mohsen el-Gillani, noted that cotton grown in Upper Egypt was already offered for LE1,000 ($168) to LE1,060 per qintar and cotton from Lower Egypt for LE1,250. El-Gillani noted that cotton manufacturers were only buying small quantities due to financial limitations and added that cotton prices had decreased globally. However, if home-grown cotton prices were to increase dramatically, factories would be forced to import from abroad. He also stated that this year's crop was 50 per cent bigger than last year's. Abul-Ela, a representative of the Emad Cotton Company, mentioned that the refusal of cotton manufacturing companies to purchase crops could be attributed to a shortage of liquidity. He added that companies asked banks like Misr, Alexandria, Cairo and the National Bank of Egypt to provide them with loans, but they had so far not received a reply. Last year these companies got loans from non-governmental banks but without guarantees; these loans including interests, had been paid back. He noted that the Government should cover the price difference. It would be tragic if peasants stopped growing cotton just because other produce might yield higher profits. Abul-Ela explained that cotton growers had incurred large seasonal expenses due to higher rent costs, worker salaries and fertilisers, while the cotton price was halved. Public and private cotton manufacturing companies required loans totalling LE2.5 billion. He stressed to Al-Gomhuria newspaper that the price of US cotton had decreased from 240 cent per pound to 112.5 cent and that was why local traders and companies did not want to buy Egyptian crops. Last year many cotton-producing countries had experienced floods, which led to price increases. For his part, Ahmed Maher, the head of el-Mehalla Spinning Company, mentioned that many manufacturers had already started to buy the new crop. He added that spinning companies bought cotton from the private sector and a market revival would depend on liquidity. He noted Giza 86 cotton cost only LE1,050 this year compared to LE 1,700 last year. For his part, Walid Abdel Rashid, the head of a cotton marketing company, stated that the new crops had not left the growers' own storage facilities due to the lack of a proper marketing policy. In Upper Egypt, cotton had been harvested a month ago, while in Lower Egypt the harvest was still in full swing. He added that at the beginning of the cotton season the Minister of Agriculture had promised farmers a profitable price, which motivated them to grow cotton on 261,000 feddans instead of 252,000 feddans as before. Abdel Rashid appealed to manufacturing companies to buy the new crops, although he was aware of the problems they faced last year when they had to export their products at prices that were much too low. He suggested that market prices should be agreed on to avoid farmers being exposed to financial hardship. According to farmer Abdel-Wahed Helmi from Sharqia province, the cost of growing one feddan of cotton, including labourer fees, land cultivation, pesticides, fertilisers etc. amounted to LE7,200.
