By Ahmed Kotb

Exports of Egyptian cotton have increased from 32,000 tons last year to 38,000 tons in the 2016/2017 season which ends this August.

This is due to the special attention paid by the government to the crop, which used to be known as EgyptΆs “white gold”. The government wants to corner a larger global market share for Egyptian cotton amid competition from lower-quality cotton.

A cabinet decision last month to set a guaranteed price for buying cotton from farmers has led to a significant increase in cultivated areas.
“There are currently 216,000 feddans of Egyptian long-staple cotton ready to be harvested in less than two months,” said Mohamed Abdel-Meguid, head of the Cotton Council at the Ministry of Agriculture and Land Reclamation.

There were 131,000 feddans of cultivated areas last season, and the increase is expected to lead to some double the amount of exports this season.
The government has set a guaranteed price of LE2,100 per kantar (about 45kg)of cotton cultivated in the Upper Egyptian governorates and LE2,300 per kantar for cotton from Lower Egypt. These are the prices the government will pay to farmers in case they cannot sell their crops.

“Prices can differ from time to time depending on different factors, including the availability of the foreign currency needed by local textile factories to buy cheaper cotton from other countries,” Abdel-Meguid explained.

He added that imported cotton of lower quality is priced at less than LE2,000 per kantar, but difficulties in obtaining foreign currency make textile factories buy more Egyptian cotton for their production.

Egyptian cotton is currently being sold in the local market for around LE2,400 and LE3,000 per kantar depending on whether the crop is from Upper or Lower Egypt, with the latter being more expensive because of its slightly better quality.

Other reasons include the tightening of controls over farms that cultivate lower-quality cotton, according to Abdel-Meguid. “Foreign cotton seeds are prohibited from being cultivated on Egyptian soil under Law 53/1966, but many farms have not been abiding by that law, especially following the political unrest in 2011,” he said.

The Ministry of Agriculture publishes a map each year in which each governorate is assigned to cultivating a specific type of Egyptian cotton, and it forbids the cultivation of foreign seeds, including for American cotton, which use less land areas and can be harvested more quickly.

Inspections were tightened last season, resulting in producing more of the high-quality long-staple cotton for which Egypt is famous.

Although Abdel-Meguid and other experts predict more exports as a result of more areas being cultivated with Egyptian cotton, he also hopes more raw cotton will go to textile factories before being exported to benefit from added value.

“I hope that raw Egyptian cotton is turned into yarn before being exported, as this will increase its value tenfold,” Abdel-Meguid said.

Sayed Mohamed, head of EgyptΆs Textiles Export Council, agreed that it would be better for the historic crop to be exported as yarn.

“Raw Egyptian cotton is exported to countries like India and Pakistan which mix it with lower quality material and sell it as Egyptian cotton,” Mohamed noted, adding that this harmed the reputation of Egyptian cotton in the global market which was why there was a need to export thread and fabric rather than raw cotton.

Textile factories currently import cotton because it is cheaper to get from countries such as India, but Mohamed suggested increasing import duties on cotton to support locally produced crops.

“Local textile factories would then get long-staple cotton from Egyptian farms and produce higher-quality threads and fabrics,” he explained, adding that these factories would pay more for the local raw cotton because they could profit from the added value of higher-quality cotton that would then be only available in Egypt, unlike Egyptian cotton threads and fabrics sold by India and Pakistan after mixing other materials.

“We need to preserve Egyptian cottonΆs reputation by preserving its quality, and to do so we need to increase the number of textile factories in Egypt and support them,” Mohamed said.

He predicted more areas being cultivated with Egyptian cotton over the next few years as a result of tightening controls over farms to ensure the quality of the crops and the guaranteed prices at which the government would buy raw cotton from farmers.

About 24 million tons of cotton are produced globally each year, with approximately 250,000 tons of that being considered high quality. EgyptΆs share of the latter is currently 50,000 tons.