Egyptian Cotton: Between Economic Growth and Sustainability

Updated 9/19/2023 8:00:00 AM

Egyptian cotton is among the agricultural contributors to the country’s economy, as "12% of Egypt's export earnings come from the textile industry," according to the Egypt Business Directory. Cotton farmed in Egypt is globally known for its high quality, especially long-staple cotton. The government has been increasing the added value of cotton by developing textile and spinning factories, and it is working on ensuring sustainability in cotton cultivation and industries.

Economic Impact of Egyptian Cotton

September marks the start of the cotton harvest annual season in Egypt. In order to encourage and support Egyptian cotton farmers, the Cabinet in May approved the minimum guarantee price for the supply of cotton for this year, so that the guarantee price is EGP 5,500 for a quintal of long-staple cotton and EGP 4,500 for a quintal of medium-staple cotton.

In terms of exports, a recent report issued by the General Authority for Cotton Arbitration showed that the total amount of commitments for exporting Egyptian cotton from the beginning of the season in September 2022 until August 12^th, 2023, amounted to about 99,000 tons. Meanwhile, the quantities of cotton shipped for export reached more than 86,000 tons, with a value exceeding $282 million, compared to about 64,000 tons exported during the previous season.

Meanwhile, Egypt’s raw cotton exports during the first five months of 2023 amounted to $103.716 million, compared to $192.412 million during the same period of 2022, the Central Agency for Public Mobilization and Statistics (CAPMAS) revealed in its monthly bulletin on foreign trade for July 2023.

Egypt’s cotton exports are very competitive in global markets. Abeer Samir, Deputy Director of the Cotton Research Institute at the Agricultural Research Center, tells Arab Finance: “All Egyptian cotton varieties are long-staple and superior. We produce about 25% to 30% of the long staple cotton in the world.”

Moreover, Mohamed Salem, Economic Researcher, MA in Economic Development, tells Arab Finance: "Our exports of cotton have already increased in recent years in the form of raw cotton, cotton, cotton yarn, and cotton textiles, with total exports of cotton and textiles in 2022 amounting to approximately $660 million."

“This figure is very modest when we compare it to Bangladesh's exports of clothing, which do not need complex industrial technology, where exports amount to $47 billion, which is exceeding our total non-petroleum exports,” Salem explains.

Textile Development

Egypt is increasing the added value of cotton through the textile industry. In January, Egypt ranked fourth among the developing countries at the world’s biggest trade fair for the textile industry, Heimtextil.

Egypt is adopting a plan to develop the spinning and weaving industry. According to the plan, the country is set to upgrade Misr Spinning and Weaving Company through establishing six new factories and developing two existing ones, according to Al Ahram Newspaper.

"After the new factories open, we will have high technology, we will no longer be wasting materials, and we will be able to have production that compares to India’s," Samir points out.

In order to further enhance the textile industry, Egypt needs to encourage the private sector. Salem says: “I believe that stimulating the private sector to intensify production, remove administrative and procedural barriers, and take advantage of currency depreciation by attracting foreign direct investments with appropriate investment incentives will greatly improve the production quality, enabling us to increase the added value of Egyptian exports.”

Sustainable Cotton Sector

Cotton cultivation consumes a lot of water, and "some experts contend that cotton is the largest user of water among all agricultural commodities," according to the World Wide Fund for Nature (WWF). This comes as Egypt has to face a water deficit of about 7 billion cubic meters a year, according to the United Nations International Children's Emergency Fund (UNICEF).

Samir says: “Egypt is the country that hosted COP27, and we have a commitment to ensure that our cotton cultivation takes into account the environment.” Egypt has begun to introduce new cotton varieties that require less water. “We now have early maturing crops, so we can get a full winter crop and reduce the inputs that are included throughout the cotton season, such as water, fertilizers, etc., and this will save overall production.” One of the varieties that Egypt currently grows is Extra Giza 92, “which is the strongest type in the world.”

Egypt is seeking sustainability when it comes to cotton farming. Therefore, the government is keen to ensure the spread of awareness among farmers. Samir adds: “Through national campaigns, we teach the farmer how to reduce the use of pesticides, how to reduce fertilizers, how to use water wisely, and how to preserve the soil.”

The future of cotton in Egypt is quite promising. With awareness and water management, Egypt can ensure the sustainability of cotton production. Moreover, as the country encourages farmers and develops its textile and spinning factories, Egypt will be competing not only in raw cotton, but also in cotton with more added value.

By Sarah Samir