Egypt seeks to weave cotton renaissance
CAIRO: 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 seen 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 (104 acres) and it’s expensive ... while the price (of cotton) is very low”, said Khalifa, who has been growing the premium long-fibre variety for over 30 years.
Profits are “meagre”, he lamented, his head shaded by his cap from the unforgiving sun on his farm in Kafr El Sheikh.
Cotton was once 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 US 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 US$540 million of cotton.
By 2016, the sector’s export receipts had fallen to US$90.4 million, according to the Massachusetts Institute of Technology.
The popular uprising that toppled president Hosni Mubarak in 2011 dealt a fresh 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 United Nations’ (UN) 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 spat between the US and voracious importer China has seen benchmark global cotton prices fall afresh, as traders take fright over Beijing imposing tariffs.
The commodity was trading at a shade under US$0.77 per pound (0.45 kilogrammes) in early October, after reaching US$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 (US$150, 130 euros) per 100 kilos.
Egypt’s cotton union says buyers are even demanding lower prices, without triggering any intervention by the government.
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 officer (CEO) of Modern Nile Cotton, one of the biggest companies in the sector. Bosaty said the major challenge is boosting productivity.
“A rise in productivity rather than prices would ensure better incomes for workers”, he said.
A cotton expert at the agriculture ministry acknowledged that modernisation is key.
“Productivity is rising,” said Hisham Mosaad.
But cotton enterprises must invest in mechanisation, as the industry is still entirely manual, he added.
Another challenge is that few Egyptian firms make finished products. — AFP