Egypt halts cotton imports in bid to boost local cro

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* Market for Egyptian cotton in decline for years

* Decision a shift from January move to stop subsidies

* Textile industry says will be negatively affected (Adds comment from textile industry, background)

By Ehab Farouk

CAIRO, July 7 (Reuters) – Egypt has halted all cotton imports in a bid to assist the production and marketing of the local crop, the agriculture ministry said on Tuesday, signalling a change of course just six months after announcing an end to support for its farmers.

“The decision aims to protect local production of cotton and resolve its marketing problems,” it said in a statement, adding that cargoes shipped before July 4 would still be accepted.

“The ministry is keen on Egyptian cotton regaining its glory on all levels,” it said.

The market for Egypt’s high-quality, extra-long staple cotton, once dubbed the country’s “white gold”, has been in decline for years.

The ministry in January halted all state support for cotton growers and told farmers not to grow the crop unless they had contracts in place to sell it.

At the time, the ministry said cultivating Egypt’s long and extra long cotton, which competes with the U.S. Pima variety for high quality fibres, was too expensive. It also noted Egypt’s own textile firms had shifted their focus to creating low-quality products with cheap raw cotton imports.

The chairman of the Egyptian Chamber of Textile Industries asked farmers to grow more short and medium staple cotton to support the country’s textile industry, which he said would be hit by the lack of cheap cotton imports.

“The decision will open the door for an expansion in importing textiles,” Mohammed al-Morshedy told the state news agency MENA.

Egypt liberalised its cotton sector in 1994, exposing farmers to volatile global prices and rising fertiliser costs.

Cotton acreage has fallen dramatically since the heyday of the 1960s, when Egypt produced cotton from up to 2.2 million feddans (924,000 hectares) helped by fixed state prices.

Current production is around 350,000 feddans, according to cotton traders.

Egypt imports cotton mostly from Greece, the United States, Burkina Faso and Benin.

Cotton imports are seen rising by 30 percent to 450,000 bales by the U.S. Department of Agriculture as a result of the decision to remove subsidies. (Reporting by Ehab Farouk; additional reporting by Omar Fahmy; writing by Maha El Dahan; editing by Jason Neely and Louise Heavens)

– Reuters

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