EGYPT AIMS TO RECLAIM ITS CROWN AS SOURCE OF THE WORLD’S BEST COTTON
▶ Long cherished for its soft and superior products, the country is upgrading quality and quantity
Treading carefully among his sprawling green plants in the Nile Delta, Egyptian farmer Fatuh Khalifa fills his arms with fluffy white cotton picked by his workers.
Durable, fine and luxuriously soft, cotton sourced from Egypt has long been regarded as the best on the market. But recent years have been far from smooth for the North African country’s farmers.
“I cultivate 42 hectares and it’s expensive ... while the price [of cotton] is very low”, says Mr Khalifa, who has been growing the premium long-fibre cotton for more than 30 years.
Profits are “meagre”, he told AFP, his head shaded by his cap from the unforgiving sun on his farm in Kafr El Sheikh.
Cotton was Egypt’s main source of wealth in the 19th century, as the Nile Delta provided fertile grounds for the crop used to make the towels, sheets and robes coveted by Europe’s burgeoning bourgeoisie.
But decades of fierce international competition has diminished returns.
Well-marketed short-fibre cotton – while lower quality than the long-fibre variety – looks good and has increasingly been used by textile giants, dealing a heavy blow to Egyptian players.
The United States and Brazil are now the world’s top cotton exporters, according to this month’s report by the US Department of Agriculture, followed by India and Australia, leaving Egypt trailing far behind.
Back in 1975, Egypt exported $540 million worth of cotton. By 2016, the sector’s export receipts had fallen to $90.4m, according to the Massachusetts Institute of Technology.
The popular uprising that toppled president Hosni Mubarak in 2011 dealt another blow to the cotton sector, as political and economic chaos hit production and export chains.
Egypt’s output of cotton fibres fell as low as 94,000 tonnes in 2013, according to the UN’s Food and Agriculture Organisation, down from 510,000 tonnes in 1971.
Last year brought producers some respite, thanks to rising prices and higher export volumes. But a trade dispute between the US and voracious importer China has resulted in global cotton prices falling again, as traders take fright over Beijing imposing tariffs.
The commodity was trading at a shade under $0.77 per pound (0.45 kilograms) early this month after reaching $0.95 – the highest level in more than six years – in early June.
In Egypt, the price has dropped back to the minimum guaranteed by the state of some 2,700 Egyptian pounds (Dh550) per 100kg. Egypt’s cotton union says buyers are even demanding lower prices.
Others offer a different diagnosis of the sector’s ills.
“The drop in prices is not in itself a bad thing”, said Ahmed El Bosaty, chief executive of Modern Nile Cotton, one of the sector’s biggest companies.
“A rise in productivity rather than prices would ensure better incomes for workers”, he says.
A cotton expert at the agriculture ministry acknowledges that modernisation is key. “Productivity is rising”, says Hisham Mosaad. But cotton enterprises must invest in mechanisation, as the industry is still entirely manual, he adds.
Another challenge is that few Egyptian firms make finished products. “We produce raw cotton for direct export,” says Mohammed Sheta, director of research at the Kafr El Sheikh cotton institute.
Egypt does not have “the factories or the means allowing us to transform it into fabric”, he says.
The state has tried to spur activity, boosting areas under cultivation over the past four years. In an experimental move, the government in September even allowed the cultivation of short-fibre cotton, but only outside the Delta region.
Experts and farmers remain sceptical, believing Egypt will struggle against foreign heavyweights in the short-fibre market segment.
But many companies regard the situation as urgent.
Even though official exports of Egyptian cotton rose 6.9 per cent by volume in the three months to the end of May compared to the same quarter of 2017, there was a 57.9 per cent fall in consumption of Egyptian cotton at home, due to the domestic market turning to imported products.
At the high end of the value chain, designer Marie Louis Bishara runs one of the few Egyptian companies that produces high-quality finished products locally for the international market.
Young men and women work side by side in her modern factory in northern Cairo, in roles ranging from overseeing looms to packing finished shirts.
Promising Egyptian quality, she has dedicated one of her lines to local long-fibre cotton. “We try to show the world that if you want to make luxury products, you have to use extra long cotton from the Delta,”
she says. Shirts, trousers and jackets stamped “Made in Egypt” have gone from the design stage on her factory floor to grace shop shelves in France, Italy and her home country.
Despite the challenges, production of cotton is set to increase. According to a US Department of Agriculture report called Egypt Cotton on the Rise, a currency devaluation, new policies to increase yields and improve quality, and higher farm-gate prices are encouraging farmers to expand cotton-producing areas and boost output next year. The USDA Foreign Agricultural Service in Cairo forecasts 2018-19 production to reach 420,000 US bales, a near 40 per cent increase from 300,000 in 2017-18.
Demand for the Egyptian product, known locally as “white gold”, has picked up as rules to ensure quality have been strictly imposed again since 2016, according to Reuters. There has also been renewed interest in pure Egyptian cotton following a 2016 scandal in which Indian
textile manufacturer Welspun India falsely passed off some of its cheap sheets as premium Egyptian cotton products, driving off some US buyers.
“This time we are coming back with a volume the market is used to and was in desperate need for ... Now the quality is back and the quantity is going up,” says Mr El Bosaty.
The agriculture ministry has boosted the cultivation area in 2018-19 to lift exports from Egypt, where sunny skies and superior seed produce a cotton with unusually long fibres used to make light and durable fabrics with a sheen and soft touch.
Egypt has planted 141,120 hectares of long-staple cotton this year, up from 92,400 hectares in 2017, a ministry spokesman said.
Cotton cultivation could expand further as the authorities push farmers to avoid waterintensive crops, such as rice, to prevent shortages as Ethiopia prepares to start filling a huge dam on the Nile, considered Egypt’s lifeline.