10 July 2017
Cairo - Egypt aims to double production of its most famous export, the silky soft cotton once known as "white gold", after a period of slumping output, an Agriculture Ministry spokesman said on Saturday. Hamed Abdel-Dayem told Reuters production should rise to 1.4 million qintar (160 kg) in the 2017-18 fiscal year that started in July from 700,000 qintar a year earlier. All the cotton will be exported.
The government aims to increase the price of the long staple cotton to more than 3000 Egyptian pounds ($168.07) per qintar, which will all be exported, the spokesman said.
Production of the cotton, used in luxury bedding, has fallen sharply since 2011, a year of political upheaval that coincided with looser regulations that degraded the quality of local cotton.
Egypt's sunny skies and superior seed help it grow a cotton known for unusually long fibers that produce a light durable fabric with an attractive sheen and soft touch.
Long-staple sells at 155 US cents per lb, about twice the price of common short-staple cotton.
Its return to world markets could provide a lucrative export opportunity at a time when Egypt has a huge trade deficit and is seeking to relaunch its stagnant economy.
In 2016 Egypt banned all but the highest quality cotton seed, dramatically shrinking the area under cultivation but restoring quality, in a bid to save its historic crop.
This year Egypt grew about 220,000 acres (89,000 hectares) of long-staple cotton compared with 130,000 acres (52,600 hectares) in 2016-2107, Abdel-Dayem said.
Farmers, spinners, and exporters say the weakness of the Egyptian pound following its flotation in November and a scandal over the alleged sale of falsely labeled Egyptian cotton have increased demand for the real thing, injecting life into a historic industry on its deathbed.
FAS/Cairo forecasts MY2016/17 cotton area harvested to increase by 20 percent or 20,000 ha to 120,000 ha. Total area harvested in MY2015/16 is estimated at 100,000 ha. Post attributes the increase in area to farmers’ willingness to grow more cotton with expectations that the government’s cash subsidies will continue for the MY2016/17 crop. In addition, the government’s takeover of the distribution of cotton seeds addresses farmers’ concerns on seed quality, which was deteriorating under private operators.
Although the Ministry of Agriculture and Land Reclamation (MALR) did not announce the targeted area for the MY2016/17 crop, announcements made by some local agricultural officials in some governorates support FAS Cairo’s forecast for area harvested in 2016/17. Local agricultural officials in Sohag governorate, southern Egypt, announced that their targeted area for MY2016/17 crop is 840 ha compared to 281 ha in MY2015/16. In Kafr El-Sheikh governorate, located in the Delta region north of Cairo, local agricultural officials announced that their target area for the 2016/17 crop is 35,700 ha compared to 32,000 ha in 2015/16.
In spite of forecast increases, Egyptian cotton production is still trending downward. Cotton area in MY2016/17 is projected to be 24 percent lower than total cotton area harvested in 2014/15 which was at 157,000 ha. Farmers who shifted to other crops like sugar beet are still hesitant to grow cotton again due to the marketing challenges facing the crop as well as the floundering and ever changing government’s policies. After backtracking on its previous policy, the government is once again providing cash subsidies for the MY2015/16 crop, a positive signal to producers that will encourage them to increase planted area in MY2016/17. In October 2015, the newly appointed government backtracked on its policy of ending cash subsidies; therefore allocating LE 261.7 million ($29.6 million) to purchase the MY2015/16 crop following pressures from farmers and traders (Cotton GAIN Voluntary Report November 2015.) This came only ten months after the cash subsidy policy was removed by the former government which was headed by then Prime Minister, Dr. Ibrahim Mehleb, and farmers were asked to have sales contracts in place before planting Cotton GAIN Annual April 2015.
Another reversal and conflicting policy came after the Ministry of Agriculture and Land Reclamation’s Central Administration for Plant Quarantine (CAPQ) issued a directive stating on July 4, 2015, that it stopped issuing import permits for cotton of all origins. The decision was a clear attempt by the government to force manufacturers to use locally produced cotton. The notion was reinforced when former MALR Minister, Dr. Salah Helal, publicly stated that the measure was intended, in part, to facilitate marketing of the 2015 cotton crop. Farmers welcomed the decision and considered it as encouraging step for them to increase the area planted with cotton in the next season. However, on July 15, 2015, and under pressure from manufacturers and importers, Egypt’s former Prime Minister, Dr. Ibrahim Mehleb, made an announcement rescinding the measure taken by CAPQ and cotton imports were allowed again GAIN Voluntary Report August 2015.
In early 2016, former Minister of Investment, Dr. Ashraf Salman, stated that the Egyptian government understood the needs of the spinning and textile industry; therefore, the government will allow the expansion of area planted with short and medium staple varieties, however, there is no clear indication when or if this will happen. Expanding the area planted with short and medium staple cotton and reducing the area planted with extra-long staple cotton is a demand that the spinning and textile industry has made for years. The industry relies on short and medium staple cotton to produce the type of yarn
required for producing some of the more popular fabrics. Post believes if the government allows the expansion in planting medium and short staple cotton, farmers will be more encouraged to grow cotton.
Cairo - Egypt aims to double production of its most famous export, the silky soft cotton once known as "white gold", after a period of slumping output, an Agriculture Ministry spokesman said on Saturday. Hamed Abdel-Dayem told Reuters production should rise to 1.4 million qintar (160 kg) in the 2017-18 fiscal year that started in July from 700,000 qintar a year earlier. All the cotton will be exported.
The government aims to increase the price of the long staple cotton to more than 3000 Egyptian pounds ($168.07) per qintar, which will all be exported, the spokesman said.
Production of the cotton, used in luxury bedding, has fallen sharply since 2011, a year of political upheaval that coincided with looser regulations that degraded the quality of local cotton.
Egypt's sunny skies and superior seed help it grow a cotton known for unusually long fibers that produce a light durable fabric with an attractive sheen and soft touch.
Long-staple sells at 155 US cents per lb, about twice the price of common short-staple cotton.
Its return to world markets could provide a lucrative export opportunity at a time when Egypt has a huge trade deficit and is seeking to relaunch its stagnant economy.
In 2016 Egypt banned all but the highest quality cotton seed, dramatically shrinking the area under cultivation but restoring quality, in a bid to save its historic crop.
This year Egypt grew about 220,000 acres (89,000 hectares) of long-staple cotton compared with 130,000 acres (52,600 hectares) in 2016-2107, Abdel-Dayem said.
Farmers, spinners, and exporters say the weakness of the Egyptian pound following its flotation in November and a scandal over the alleged sale of falsely labeled Egyptian cotton have increased demand for the real thing, injecting life into a historic industry on its deathbed.
FAS/Cairo forecasts MY2016/17 cotton area harvested to increase by 20 percent or 20,000 ha to 120,000 ha. Total area harvested in MY2015/16 is estimated at 100,000 ha. Post attributes the increase in area to farmers’ willingness to grow more cotton with expectations that the government’s cash subsidies will continue for the MY2016/17 crop. In addition, the government’s takeover of the distribution of cotton seeds addresses farmers’ concerns on seed quality, which was deteriorating under private operators.
Although the Ministry of Agriculture and Land Reclamation (MALR) did not announce the targeted area for the MY2016/17 crop, announcements made by some local agricultural officials in some governorates support FAS Cairo’s forecast for area harvested in 2016/17. Local agricultural officials in Sohag governorate, southern Egypt, announced that their targeted area for MY2016/17 crop is 840 ha compared to 281 ha in MY2015/16. In Kafr El-Sheikh governorate, located in the Delta region north of Cairo, local agricultural officials announced that their target area for the 2016/17 crop is 35,700 ha compared to 32,000 ha in 2015/16.
In spite of forecast increases, Egyptian cotton production is still trending downward. Cotton area in MY2016/17 is projected to be 24 percent lower than total cotton area harvested in 2014/15 which was at 157,000 ha. Farmers who shifted to other crops like sugar beet are still hesitant to grow cotton again due to the marketing challenges facing the crop as well as the floundering and ever changing government’s policies. After backtracking on its previous policy, the government is once again providing cash subsidies for the MY2015/16 crop, a positive signal to producers that will encourage them to increase planted area in MY2016/17. In October 2015, the newly appointed government backtracked on its policy of ending cash subsidies; therefore allocating LE 261.7 million ($29.6 million) to purchase the MY2015/16 crop following pressures from farmers and traders (Cotton GAIN Voluntary Report November 2015.) This came only ten months after the cash subsidy policy was removed by the former government which was headed by then Prime Minister, Dr. Ibrahim Mehleb, and farmers were asked to have sales contracts in place before planting Cotton GAIN Annual April 2015.
Another reversal and conflicting policy came after the Ministry of Agriculture and Land Reclamation’s Central Administration for Plant Quarantine (CAPQ) issued a directive stating on July 4, 2015, that it stopped issuing import permits for cotton of all origins. The decision was a clear attempt by the government to force manufacturers to use locally produced cotton. The notion was reinforced when former MALR Minister, Dr. Salah Helal, publicly stated that the measure was intended, in part, to facilitate marketing of the 2015 cotton crop. Farmers welcomed the decision and considered it as encouraging step for them to increase the area planted with cotton in the next season. However, on July 15, 2015, and under pressure from manufacturers and importers, Egypt’s former Prime Minister, Dr. Ibrahim Mehleb, made an announcement rescinding the measure taken by CAPQ and cotton imports were allowed again GAIN Voluntary Report August 2015.
In early 2016, former Minister of Investment, Dr. Ashraf Salman, stated that the Egyptian government understood the needs of the spinning and textile industry; therefore, the government will allow the expansion of area planted with short and medium staple varieties, however, there is no clear indication when or if this will happen. Expanding the area planted with short and medium staple cotton and reducing the area planted with extra-long staple cotton is a demand that the spinning and textile industry has made for years. The industry relies on short and medium staple cotton to produce the type of yarn
required for producing some of the more popular fabrics. Post believes if the government allows the expansion in planting medium and short staple cotton, farmers will be more encouraged to grow cotton.
© The Saudi Gazette 2017
