Cotton in luck
FOR YEARS, the state of Egypt's cotton production has been steadily deteriorating due to a number of factors. But 2010 brought much-needed good news for cotton farmers, as a lower supply and higher demand on world markets pushed prices upwards.
According to a recent report by Al-Ahram Centre for Political and Strategic Studies, Egypt's share of the international high quality long staple cotton decreased from 1.5 per cent in 2002/2003 to 0.8 per cent in 2006/2007, for the benefit of other countries such as India whose share rose from 12.5 per cent in 2002/2003 to 20.3 per cent in 2007/2008.
The reason behind this deterioration is that the area of cotton cultivated lands has shrunk, as has land productivity. This has had a clear negative impact on numerous areas such as the textiles industry, the labour market and the country's balance of payments.
According to the report, cotton cultivated land was reduced from 1.4 million feddans in the 1970s to 313,000 feddans in 2008/2009. Farmers abandoned the cultivation of cotton because the government paid them prices which were often not satisfactory and did not cover their costs as compared to other crops.
The situation was different in 2010 since international cotton prices have more than doubled due to smaller harvests worldwide and a strong demand from China. Egyptian farmers who used to lobby the government for LE700 per qantar (one qantar equals 50 kilogrammes) are this year getting LE1,800 per qantar.
High international demand was clearly shown in Alexandria Cotton Exporters Association figures which registered that 83,000 tonnes of cotton worth $300 million were contracted in November 2010 compared to 35,000 tonnes at $79 million last year. Egypt's total cotton exports are expected to reach 100,000 tonnes.
Moreover, there are optimistic forecasts for the next year's harvest. According to a report issued by the United States Department of Agriculture (USDA), cotton areas and production are expected to increase by 34 per cent in 2010/2011.
To help Egyptian cotton regain its position on international markets and recuperate its old "white gold" nickname, Al-Ahram's report made a number of recommendations including the necessity of supporting farmers in their fierce competition against farmers in other countries, particularly the US, where the government offers producers financial support.
The report argued that the negative impact of US government farm subsidies on African as well as Asian cotton producers should be raised by the Egyptian government during the coming World Trade Organisation (WTO) round as an important factor that leads to unfair competition.
Moreover, the report recommended that the government should set out an agricultural strategy to divide Egypt's land in a manner which will match its social needs as well as deal with the increase of its growing population. This strategy should include applying measures that help to raise cotton's quality and productivity, the report said.
The recommendations also included the establishment of a unified association which will take all decisions concerning cotton including production, collection, pricing, storing and marketing. This association should include representatives from all concerned parties such as farmers, traders and manufacturers.