Production and exports of Egyptian cotton increasing significantly

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Recently Egyptian President Abdel-Fattah al-Sisi announced that he would support the expansion of cotton planting as a way to boost the national economy. Cotton production and exporting is a strategic sector of Egyptian economy because it contributes 26.4 percent of the gross industrial product and generates 7 billion U.S. dollars in annual exports.4444

Figure 1: Egyptian cotton is one of the most premium cotton in the world.

For hundreds of years cotton has been grown in Egypt. Egyptian cotton is the best around the world because of its long fiber that makes it softer and stronger. The silky soft cotton once known as “white gold” was so valuable that products made from most of the crop was exported to the European countries. Egyptians themselves could hardly purchase items that made from its cotton. However, for a long period the business of cotton was not significant for the country, especially since 2011 the production of the cotton has declined sharply. It was time of political turmoil that coincided with looser regulations that ruined the quality of local cotton. Earlier, after 1994, when ‘free market’ economy started in Egypt, the government made a decision to liberalize the market.  That meant Egyptian farmers no longer had direct government subsidies, which discouraged farmers to harvest cotton and they started to cultivate other crops.

After a period of slumping output, production and exports of the cotton, used in luxury bedding, have increased. According to the state-run Central Agency for Public Mobilization and Statistics, Egypt’s cotton exports jumped by 63.9% during the first quarter of the planting season of 2016/2017. Egypt’s cotton exports were 202,500 bales in the period from September to November compared to 123,600 bales in the same period a year earlier.

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Figure 1: Showing the trends of Egypt’s cotton production from 2005 to 2017.

In August 2016, a US retail chain accused an India’s textile manufacturer for using cheaper, non-Egyptian cotton in bed sheets and pillowcases. The Indian manufacturer did not deny the accusations, rather admitting that some of their products were falsely labeled as 100% Egyptian cotton. After the incident, internationally, retailers have begun to monitor their products more closely that labeled as 100% Egyptian cotton, many requiring manufacturers to provide evidence for products labeled as such. In 2016, the Cotton Egypt Association started licensing the use of the Egyptian cotton logo to suppliers and manufacturers all over the world to ensure the quality. Now carrying the logo means that the association certifies the authenticity of the Egyptian cotton through DNA analysis. In the same period, Egypt banned all but the highest quality cotton seed, dramatically shrinking the area under cultivation but restoring quality, for saving its historic crop.

The US Department of Agriculture (USDA) forecasted on a report that Egypt’s cotton area would double to 110,000 hectares and production would almost double and reach 340,000 bales in the marketing year (MY) 2017/2018.  On the other hand, imports are forecast to drop by 20% to a record low of 420,000 bales, while exports are forecast to increase by 66% to reach 200,000 bales.

However, manufacturing in Egypt has developed considerably over the last thirty years, which is a reason of increasing cotton production. Many textile factories have opened all over Egypt, where 25 percent of the labor force is working.

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