Absence of indicative price affects cotton sowing in Egypt

18 Jan '21

2 min read

Pic: Shutterstock

The Egyptian government has been announcing an indicative price for buying cotton before the planting season commenced every year. However, for the first time, the government had not announced indicative prices in marketing year (MY) 2019-20. This has affected cotton cultivation in MY 2020-21, which is expected to decline 35 per cent to 65,000 hectares.

The indicative price was a subtle attempt by the Egyptian government to urge the textile industry to buy cotton from farmers at the indicative price, However, it was not a price support or commitment from the government to buy the crop.

In MY 2020-21, total cotton area harvested in Egypt is expected to decrease by approximately 35 per cent to 65,000 hectares (ha), from 100,000 ha in MY 2019-20, according to Fibre2Fashion's market analysis tool TexPro.

The low cotton prices was another reason for farmers sowing less cotton. In MY 2019-10, price averages were $133 per 50 kg of lint cotton to $146 per 50 kg of lint cotton for extra-long varieties, and $120 per 50 kg of lint cotton to $133 per 50 kg of lint cotton for long-medium staple cotton.

In MY 2020-21, cotton consumption of Egypt is expected to plunge by 5,000 bales to 6,25,000 bales, a drop of 1 per cent over last year attributed to lower domestic demand due to decrease in demand from public spinners.

Click here to read the complete article on challenges faced by Egyptian cotton in 2020

Fibre2Fashion News Desk (RKS)

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