Egypt saves $ 2B in cotton imports

CAIRO - 14 May 2024: Egypt has made significant progress in cultivating short staple cotton, especially after successfully localizing it in the Eastern Owaynat region over the past four years.

With a productivity approaching global standards, this type of cotton represents 98.5% of the world's cotton trading and industry, alongside long staple cotton, in which Egypt also excels, alongside American Pima cotton.

The Ministry of Public Business Sector, in coordination with the Ministry of Agriculture and the National Service Projects Organization, will begin cultivating short staple cotton in the Eastern Owaynat region next Wednesday on an area of ​​about 4,000 acres, representing four times the area planted last season.

Sources revealed that the cultivation will commence with seeds remaining from last season's crops, under the supervision of cotton cultivation expert Dr. Said Abdel Tawab. This coincides with the arrival of imported seeds on Wednesday, May 15th. The land has been prepared for cultivation, especially after the end of the wind and dust storms, which negatively impact cotton.

Expanding the cultivation of this type of cotton is crucial for providing raw materials to national factories instead of importing them, saving nearly $2 billion annually.

Moreover, it provides thousands of seasonal job opportunities and hundreds of permanent ones. It also allows for the utilization of new areas in Eastern Owaynat and Tushka, with the potential to expand cultivation to 600,000 acres annually.

Dr. Ahmed Shaker, CEO of the Holding Company for Cotton, Spinning, Weaving, and Garments, stated that there is a drive to expand the cultivation of short staple cotton, whether in the Eastern Owaynat or Tushka regions, especially after the success of last season's crops. This is in line with the urgent need for this type of cotton to supply local factories instead of importing it, according to the directives of Dr. Mahmoud Essmat, Minister of the Public Business Sector.

The state's plan includes the cultivation of 150,000 acres of short staple cotton in the Eastern Owaynat and Tushka regions and some areas in the Dabaa region in the coming years, then increasing it to 600,000 acres according to the directives of President Abdel Fattah el-Sisi.

This includes starting with 5,000 acres during the current year through the Egyptian Cotton Trading and Ginning Company, in coordination with the Ministry of Agriculture and the National Service Projects Organization, and under the supervision of Dr. Said Abdel Tawab, the global expert in desert agriculture.

The attractiveness of cultivating short staple cotton has prompted many private sector companies to apply for approval to cultivate this type of cotton, especially since the entry of the private sector into the cultivation of short staple cotton will not burden the government.

This contributes to providing it to local factories instead of importing short staple cotton and its textiles annually, saving about $2 billion, especially after the global rise in cotton prices due to logistical factors, floods, and conflicts in Sudan, which tripled its price.

According to sources, expansion in cultivation will be gradual, starting from 5,000 acres this year and multiplying it several times in the coming years to implement the plan within three years, with private sector participation.

Engineer Ashraf Badawi, an expert in the spinning and weaving industry, stated that after the opening of the giant Mahalla complex, with a production capacity exceeding 30 tons per day of fine yarns for 182,000 spindles using the latest Rieter machines from Switzerland in the world, in addition to 500,000 spindles in the private and investment sectors with a production capacity exceeding 80 tons per day of fine yarns, Egypt's production of fine yarns averages 110 tons daily, equivalent to the consumption of Egyptian cotton annually, equivalent to 60,000 tons of Egyptian cotton, nearly half of Egypt's cotton production, which reaches 150,000 tons annually.

Badawi noted that the global demand for fine yarns reaches 1.6%, while the consumption of thick and medium yarns globally and domestically reaches 98.4%.

Regarding the upcoming strategy to bridge the gap in the local markets for thick and medium yarns and provide hard currency, which amounts to about $3 billion annually for materials, yarns, and fabrics made from short staple cotton due to the import of thick and medium yarns, he pointed out that if the newly established yarns at the Greater Mahalla and Shibin al-Kom companies, which are models from the nineties and late eighties with German machines and others, were operated, Egypt's daily production of thick and medium yarns would be at least 180 tons for only 550,000 spindles, equivalent to LE 23.5 million daily, and monthly, this amounts to LE 600 million deducted from the price of imported yarns.

Moreover, Egypt imports short staple cotton amounting to $564.44 million to provide materials to spinning and weaving factories, in addition to importing polyester filaments amounting to $993.13 million, and cotton-polyester staple fibers amounting to $773.38 million. This is in addition to crochet fabrics reaching $263.420 million, as well as ready-made garment accessories amounting to $172.9 million.

Egypt's exports of cotton reach about $420 million, necessitating an expansion in the cultivation of short staple cotton to achieve self-sufficiency, alongside an expansion in manufacturing recycled polyester as a substitute for imports, especially since our total imports of inputs and materials for the spinning, weaving, and garment industry reach about $2 billion annually.