In an effort to increase the demand for local production, especially short and medium staple cotton from Upper Egypt, the Ministry of Industry and Foreign Trade and the Ministry of Agriculture and Land Reclamation decided to impose an import ban on all cotton.
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GAIN Report Number:
Cotton imports banned in Egypt
Cotton and Products
In an effort to increase the demand for local production, especially short and medium staple cotton from
Upper Egypt, the Ministry of Industry and Foreign Trade and the Ministry of Agriculture and Land
Reclamation decided to impose an import ban on all cotton. Prices offered for local seed cotton had
dropped in line with international prices, leading to farmer unrest and the potential for large-scale
demonstrations. U.S. upland cotton gained access to the Egyptian market last year, and U.S. exports
totaled $46 million so far in CY 2011 versus $10 million in 2010, when Egypt was primarily a market
for U.S. Pima cotton. Egypt has refused entry to 1,500 tons of Greek cotton which was already landed
Egypt is facing a major crisis in their domestic cotton marketing as reported in our GAIN Cotton
Update. Farmers went into the planting season this spring with high price expectations for their crop,
due to prevailing high world prices and Government of Egypt (GOE) statements encouraging
production. However, with improved world cotton production and reduced demand due to the lingering
effects of the worldwide economic crisis, world prices have dropped. In addition, the overall economic
effects of the January 2011 Revolution are being felt in terms of reduced liquidity and willingness of
banks to provide financing for seed cotton purchases by gins and traders.
The Ministry of Industry and Foreign Trade (MIFT) and the Ministry of Agriculture and Land
Reclamation (MALR) have been meeting regularly since August of this year to monitor the demand and
prices of the local cotton crop. The situation has gotten progressively worse on both fronts as importers
are buying more imported cotton for quality and price preferences to supply the local textile industry.
The primary impact has been on purchases of short/medium staple Upper Egypt cotton, but also is
affecting long and extra long staple cotton marketing. On October 25th, the Farmers Union met with
both Ministers and threatened to bring two to six million farmers to Cairo to protest the lack of demand
and low prices. The Ministers responded by signing Ministerial Decree No. 1864 for 2011 which
temporarily bans cotton imports for the current season until the local crop is sold.
As previously reported, cotton production is up 37 percent in 2011 due to high prices last year. There
may be some move by the GOE to subsidize the difference between international and local prices
maintain the competitiveness of the local textile industry. MALR is the only supplier of cotton seed to
the growers and the expectation was that given the present market situation, farmers would reduce area
planted next year. Cotton production has historical importance to Egypt and the GOE has been
encouraging revival of the industry after many years of decline.
No (1864) for 2011
After reviewing the Agricultural Law issued by Law No.53 for the year of 1966
and all its amended laws.
And law No. 118 for the year of 1975 organizing Imports and Exports
And on what the meeting held at Ministry of Agriculture has ended up to in
Saturday August 20, 2011 and Tuesday October 25, 2011 under the auspices of
Ministers of Agriculture and Land Reclamation and Ministry of Industry and
Article (1): Temporarily stopping the importation of cotton until contracting (selling) all
Egyptian cotton for the current season (harvested season 2011) according to the data of
the General Committee for Organizing Local Cotton Trade.
Article (2): All competent authorities have to implement this decree.
Issued in October 25, 2011
Minister of Agriculture Minister of Industry
And Land Reclamation and Foreign Trade
Salah EL-Sayed Youssef Mahmoud Essa