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Tuesday, 26 January 2021

Reviving Egypt’s white gold

Egypt’s internationally famous long-staple cotton has faced pricing and marketing challenges, but there are ways to restore the white gold’s former glory

Ahmed Abdel-Hafez, Thursday 20 Aug 2020
Reviving Egypt’s white gold
(Photo: AFP)
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From March to June this year Egypt’s farmers were busy harvesting the country’s white gold — cotton. With 180,000 feddans cultivated, most of the harvest, reaching 1.2 million qantars, was long-staple cotton.

The Agriculture Ministry’s cotton committee had initially forecast this year’s harvest to be around 1.5 million qantars, with each feddan providing eight qantars on average.

Over the past two years the area cultivated with cotton in Egypt has been shrinking. 2018 was a successful year, and the government had bought a qantar of cotton from farmers for LE3,300 the year before, encouraging them to expand their produce the following season.

However, when it was announced in 2019 that a qantar of cotton would be bought for LE2,500 in Upper Egypt and LE2,700 in Lower Egypt, farmers cultivated less land, reaching 236,000 feddans in 2019 and 180,000 feddans in 2020.

Chairman of the Farmers Syndicate Hussein Abu Saddam warned that Egypt may not be able to compete effectively on the international stage if less and less land is cultivated with cotton.

Cotton is becoming less attractive to farmers due to its decreasing prices, reaching LE2,100 per qantar, and because of the marketing crisis that occurred last year, resulting in weaker demand for cotton.

Intensifying the crisis last year was the harvest from the year before that was not effectively marketed as there was no marketing plan for this amount of cotton, Abu Saddam added.

Cotton is a strategic, labour-intensive crop, with 50 workers needed to harvest cotton from one feddan of land. Left-over cotton fibre and cotton oil can be used in feed manufacturing.

In order to avoid similar problems next year, Abu Saddam said the government should agree the price of cotton with farmers before the beginning of the season. Prices should be decided according to local costs and not international prices as happened a year earlier.

If the international demand for Egyptian cotton is weak, the government should buy the crop from farmers at a reasonable profit margin — as the constitution stipulates, he said.

“A farmer is his own finance minister,” said Walid Al-Saadani, head of the General Association for Cotton Producers, explaining that “farmers decide on the crops they want to grow based on their ability to cover the cost of harvesting and making a fair profit.”

 He concurred with Abu Saddam that the lower price of cotton was the reason farmers had planted fewer feddans this year.

President Abdel-Fattah Al-Sisi has launched a programme to support Egyptian cotton and to help it to regain its international reputation. The programme made the Ministry of Agriculture the sole distributer of cotton seeds, Al-Saadani said.

But there were still problems in the lower price of cotton that farmers believe does not cover the cost of planting and harvesting and in the marketing of Egyptian long-staple cotton abroad.

The majority of local factories use spindles designed for short and medium-staple cotton, which is why only 20 per cent of Egypt’s cotton production is used at home and the rest is exported, Al-Saadani said.

Egypt imports two million qantars of short and medium-staple cotton every year, this being lower quality than Egypt’s own cotton. The imported quantities cover production needs at home, meaning that even with the decrease in the amount of land cultivated with cotton this year there will be no increase in imported quantities.

However, it will mean a reduction in the amount of foreign currency received in exchange for exported cotton.

Al-Saadani warned against continuing the habit of exporting raw cotton to foreign manufacturers and said there was a need to continue the presidential programme of using long-staple cotton in local spinning factories. This could add value to exported textiles and increase local demand for items made of Egyptian cotton, also helping Egyptian cotton clothes to compete internationally.

“Changes in the harvest will lead to the loss of international contracts based on fixed quantities. If this happens, importers will look to other countries to provide them with needed cotton,” Al-Saadani warned.

During cotton’s golden age, Egypt produced 10 million qantars of cotton annually, with this falling to two to three million qantars before 2014.

*A version of this article appears in print in the 20 August, 2020 edition of Al-Ahram Weekly

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