Recovery strategies for cotton - Economy - Al-Ahram Weekly

Al-Ahram Weekly

2 days ago

Egypt's cotton harvest is expected to drop significantly following the halving of land cultivated with world-renowned Egyptian cotton this year.
The reduction is anticipated to reach 50 per cent of the 314,000 feddans planted in 2024. Following the harvest season, which ends in mid-June, the amount of land that has actually been cultivated with cotton becomes clear. Egypt had targeted the cultivation of 270,000 feddans of cotton this year.
Until the end of May, the total cultivated area had not exceeded 100,000 feddans, including 42,000 feddans in Upper Egypt and 22,000 feddans in Lower Egypt. The reluctance of farmers to grow cotton this season has been caused by factors including the widening disparity between domestic and international cotton prices, the withdrawal of numerous private-sector firms from cotton auctions, delays in disbursing payments to farmers following crop delivery, and issues in modernising the spinning and weaving sector.
Walid Al-Saadani, chairman of the General Committee for Cotton Trade and Regulation, stressed the need for the full implementation of the National Cotton Strategy, initiated by President Abdel-Fattah Al-Sisi in 2015 alongside the enactment of the new cotton law.
The strategy has succeeded in restoring Egyptian cotton to nearly 80 per cent of the glory it witnessed in the 1950s, and between 2015 and 2020 Egyptian cotton was a reliable source of income for both farmers and the state, imposing no financial burden on either.
However, Al-Saadani warned that the decline in areas cultivated with cotton could persist in the coming years unless the international marketing component of the strategy is properly implemented. That would ensure that no fewer than 300,000 feddans are cultivated with cotton annually to meet domestic demand and maintain steady production.
The strategy should also ensure the modernisation of national spinning mills, Al-Saadani said, which currently constitute the primary source of domestic demand. Any slowdown in developing the mills decreases demand and therefore also reduces prices.
A source speaking on condition of anonymity said there is an intrinsic link between Egypt's cotton cultivation system and the development of the national spinning and weaving industry in which billions of pounds are being invested. The decline in cotton production may place further strain on this system, leading to increasing imports to meet its needs as mills are upgraded, the source said.
Compounding this issue is growing competition, particularly from US cotton suppliers who offer US cotton to Egypt's spinning and weaving sector at prices lower than those of domestic cotton to meet local demand.
A fund has been proposed to mitigate fluctuations in local cotton prices made up of allocations from the state budget and fees imposed on beneficiaries from Egyptian cotton. The fund, allowing for flexible pricing mechanisms, could be used when global prices decline due to external shocks. The financial support provided through the fund would also extend to assisting farmers in covering production costs.
Although cotton is regarded as a profitable summer crop, this has not always been the case recently due to challenges that began last summer, said Mustafa Emara, spokesperson for the Cotton Institute at the Ministry of Agriculture and Land Reclamation.
The late disbursement of payments to farmers had coincided with a rise in the cost of production inputs, leading to a significant increase in the total cost per feddan. Simultaneously, global cotton prices had drastically declined, prompting many private export firms to withdraw from domestic cotton auctions, Emara explained.
The Ministry of Agriculture's target area for cotton cultivation is determined by multiple factors, including seed availability, projected export volumes, and water resources. These factors are studied by a specialised committee comprising representatives from the Cotton Management Committee, the Cotton Institute, the Export Councils, the Textile Chamber, and the ministries of irrigation, the public business sector, and supply.
Solutions introduced by the Ministry of Agriculture and the Cotton Institute in like situations include the intensification of on-site educational and advisory sessions to educate farmers about optimal practices to maximise productivity. By increasing yields and improving cotton quality, farmers can offset the impact of falling prices.
Adel Attia, a member of the Cotton Farmers Association in Sharqiya governorate, said that the area cultivated with cotton this year would likely not exceed 150,000 feddans due to delayed payments and pricing uncertainty.
He attributed this year's contraction in cotton production primarily to the delay in disbursing payments to farmers, some of whom have been waiting for over seven months since delivering their cotton to auction centres. He urged the government to announce a guaranteed delivery price for cotton, rather than an indicative price, stressing that this must be fair, attractive, and reflective of actual production costs.
He referenced the prime minister's prior announcement of a delivery price of LE12,000 per feddan and stressed the need to declare this year's price no later than mid-June to incentivise farmers and put to rest rumours suggesting that the 2025 delivery price could fall by 50 per cent compared to 2024.
He also noted that cotton cultivation occupies land for up to six months, a relatively long period compared to other crops. As a result, incentivising farmers to grow cotton is essential to ensure they can afford production costs and remain committed to its cultivation.
* A version of this article appears in print in the 3 July, 2025 edition of Al-Ahram Weekly
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