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USDA GAIN: Oilseeds, Cotton, Sugar, Grain and Feed

11 April 2012

USDA GAIN: Egypt Cotton and Products Annual 2012USDA GAIN: Egypt Cotton and Products Annual 2012

Post forecasts total area planted in 2012/2013 to decrease by 30% to 154,000 HA versus 220,000 HA in 2011/2012. Farmers are reluctant to grow cotton after many were unable to sell their 2011/2012 production in a timely manner and at a high enough price. Production of lint cotton is forecast to decrease by 27% at 550,000 bales versus 745,000 bales in 2011/2012. Total domestic consumption is forecast at 630,000 bales compared to 535,000 bales in 2011/2012. Imports are forecast to increase to 560,000 bales versus 200,000 bales in 2011/2012 season. Imports in 2011/12 were impacted by the ban on cotton imports from October 2011 through March 2012. Exports are forecast to increase to 440,000 bales versus 400,000 bales during the 2011/2012 season.
USDA GAIN Report - Oilseeds, Cotton, Sugar, Grain and Feed



Production of lint cotton is forecast to decrease during the 2012/2013 season by 27% to 550,000 bales from 745,000 bales in the 2011/2012 season. The decrease in production is due to the drop in total area planted by a forecast 30%. Farmers are reluctant to grow cotton (planting season starts in April) after many were unable to sell their 2011/2012 production and were disenchanted with the relatively low prices as compared to last year. As of late March, almost 412,000 bales out of total production of 745,000 bales remained stored by farmers and traders. Reports from the different governorates, especially in Beheira, the largest cotton-growing governorate, indicate that many farmers shifted to other crops especially rice instead of cotton for the 2012/2013 season as rice is returning better profits.

Farmers are shying away from cotton due to the cotton marketing crisis that caused problems in 2011/2012 . The crisis started when the government announced, before the planting season, the prices that farmers could expect for the cotton crop for marketing year 2011/2012 based on the prevailing prices in 2010/11, which were at record levels. This encouraged farmers to increase the area planted by 37% (220,000 HA versus 157,000 HA in 2010/2011) in order to earn increased profits. Consequently, the total production increased from 557,000 bales in 2010/2011 to 745,000 bales in 2011/2012. The increase in local lint cotton production was accompanied by improved world cotton production and reduced world demand. The announced prices were far higher than the international prices prevailing at harvest time. The lingering effects of the world wide economic crisis and the absence of sound government’s policies to market the crop locally and internationally were additional factors affecting prices.

Egypt produces three different varieties of cotton, the Extra Long Staple (ELS), the Long Staple (LS) and the Medium and Short Staple cotton. The Extra Long Staple cotton has different sizes (Giza 45-Giza 70- Giza 87- Giza 88- Giza 92) but the predominant variety is “Giza 88”. It represents 20% of Egypt’s total production and is grown in the northern part of the country. The second staple variety is the Long Staple cotton or “Giza 86” which represents 70% of Egypt’s total cotton production and is grown in the Nile Delta area. The third variety is the Short and Medium Staple or “Giza 80 and Giza 90” which represents only 10% of Egypt’s total cotton production and grows in the Upper Egypt area (Table 2 for total production of each variety).


Total lint cotton domestic consumption is likely to increase to 630,000 bales during the 2012/2013 season versus 535,000 bales in 2011/2012. Spinners used to be the main consumer for the locally produced cotton using almost two thirds of the total crop every year. In recent years, spinners demand decreased due to the higher prices and the different imported varieties required by industry. Today, spinners depend on imports of medium and short staple cotton varieties which are needed by the industry. Spinners usually import 53% of their needs and buy 47% from the local supply. In 2011/2012 the total amount of lint cotton delivered by traders to local spinning mills (thru March 15, 2012) was 132,000 bales which represent 26% of their consumption.

In 2011/12, out of the total lint cotton delivered by traders to local spinning mills, State owned spinning mills received 47% (or 63,000 bales) while private and investment spinning mills received 52% (or 69,000 bales). Also, out of total lint cotton delivered to local spinning mills, state owned trading companies provided 34% (45,000 bales) while private and investment trading companies provided 66% (87,000 bales).

The lower consumption by local spinners in 2011/2012 season was due to four reasons;

  • The cotton imports ban imposed by the GOE in October 2011 and cancelled in March 2012. The import ban prevented the local spinning mills from importing their needs of the short and medium staple varieties needed for industry.
  • The high prices of locally produced cotton that was too high for the local spinning mills to afford.
  • Sources report that 45-55% of the spinning mills are not operating at full capacity due to regular workers’ strikes and lack of financial liquidity.
  • The Government’s inability to provide the promised funds of LE 300 million (USD 50 million) to subsidize the public sector holding companies that are engaged in the spinning and weaving industry in order to subsidize their purchase of local cotton.

All have negatively affected the spinning industry during the 2011/2012 season and consequently reduced their consumption.


Imports are forecast to increase at 560,000 bales in 2012/2013 season versus 200,000 bales for 2011/2012. Sources in the trade estimate the total amount of imported cotton to date at 133,000 bales and expect it to increase to 200,000 bales, now that the import ban is lifted. (Gain Cotton Update ). On March 18th, the Minister of Agriculture and Land Reclamation (MALR) signed Decree 438 cancelling Decree number 1864 dated October 25, 2011 (GAIN Cotton Update) thereby permitting the importation of cotton from all origins.

The cotton import ban hindered the access of U.S. upland cotton to the Egyptian market. U.S. exports of upland cotton to Egypt totaled some 36,000 bales valued at over $45 million in MY 2010/2011 versus zero so far this year. The increased U.S. exports to the Egyptian market are due to the needs in the local spinning mills for US upland cotton.

Exports are forecast to increase to 440,000 bales in 2012/2013 season versus 400,000 bales in 2011/2012. Thru March 18, 2012, total export commitments for the 2011/2012 season were 272,000 bales of which only 158,000 bales have been shipped. Total export commitments include 68% or 183,802 bales for Giza 86 and 32% or 86,495 bales for Giza 88. The leading importers were China (25%), Pakistan (18%) and India (14.5%).


Ending stocks for 2012/2013 are estimated at 110,000 bales versus 70,000 bales in 2011/2012. Sources report that some traders were intentionally reluctant to sell their cotton in 2011/2012 due to low prices and expectations of shortages in local production during the 2012/2013 season. Some traders expect an increase in local cotton prices due to low production and plan to sell their cotton in the coming season at a higher price.

April 2012

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