NewsNorth AfricaCrackdown on fake cotton helps revive Egypt crop.

Mon,21Aug2017

Posted on Wednesday, 15 February 2017 11:17

Crackdown on fake cotton helps revive Egypt crop.

By Reuters

Workers handle raw cotton at a mill in Tanta, Egypt. Photo: PHILIP MARK/AP/SIPAEgypt's most famous export, the silky soft cotton prized by makers of luxury bedding and clothing, has become so scarce as production has fallen that most supplies sold under its brand name last year were fake.

 

But a surge in local cotton prices ahead of next month's planting season, and a crackdown on ersatz Egyptian cotton worldwide, are reviving interest in cultivating the long-neglected crop.

Farmers, spinners, and exporters say the weakness of the Egyptian pound following its flotation in November and a scandal over the alleged sale of falsely labelled Egyptian cotton have increased demand for the real thing, injecting life into a historic industry on its deathbed.

Last year, agricultural production of Egypt's high quality long-staple cotton hit a more than 100-year low.

In a bid to save its historic crop, Egypt in 2016 banned all but the highest quality cotton seed, dramatically shrinking the area under cultivation but restoring quality.

The US Department of Agriculture estimates that in 2016-17 Egypt will produce 160,000 bales, half the previous year's crop and a fraction of the 1.4 million produced in 2004-05.

With global stocks low, some foreign suppliers have mixed lower grade lint into yarns and fabrics, passing them off as Egyptian cotton, spinners and exporters said.

The Cotton Egypt Association, which provides an official logo to suppliers of 100% Egyptian cotton, estimates that about 90% of global supplies of Egyptian cotton last year were fake.

The scandal hit the headlines when U.S. retail chain Target Corp accused Indian textile manufacturer Welspun India of using cheaper, non-Egyptian cotton in sheets and pillowcases.

Retailers began reviewing whether to stop selling Welspun products and demanded that those offering 100% Egyptian cotton should show proof.

The Head of Cotton Egypt Association, Khaled Shuman, said his association had received an "enormous number" of requests to use its logo, which guarantees quality, since the Welspun affair, with 20 companies signed up since December.

Exporters and spinners say one of the biggest challenges is supply: there simply isn't much Egyptian cotton.

Flourish once more

This is set to change. Farmers and exporters expect a comeback for the crop, spurred by the country's decision to float its currency, halving its value overnight but helping push local cotton prices sky high.

Its return to world markets could provide a lucrative export opportunity at a time when Egypt has a huge trade deficit and is seeking to relaunch its stagnant economy.

At Egyyarn, a yarn factory on the outskirts of Cairo, January was the first month its machines had run at full capacity in over a year, owing to a rise in demand.

"Based on the characteristics that we've seen, cotton is considered better this year - this means, there are no losses, and no problems in operations," said factory manager Ahmed Hussein.

The plant, with humidity levels set high to preserve the soft touch of its long-staple cotton, produced 150 tonnes of yarn in January, up from 110 tonnes a month earlier.

Hussein now hopes that demand will continue to increase and Egypt's cotton industry will flourish once more.



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