Egypt cotton area and exports revised down

The Ministry of Agriculture and Land Reclamation has updated their estimate of the area cultivated with cotton for the 2012/2013 season.

Production of lint cotton is forecast to decrease during 2012/2013 season by 42.2 per cent to 430,000 bales versus 745,000 bales in 2011/2012 season. The expected decrease in production is a consequence of the drop in total area planted.

Total area planted is forecast to drop by 45 per cent at 121,000 HA in 2012/2013 versus 220,000 HA in 2011/2012, as farmers respond to lower market prices. Farmers are also reluctant to grow cotton due tother marketing problems in selling the 2011/2012 crop. Through May 27 th, 2012, 313,000 bales out of the total production of 745,000 bales in 2011/2012 remained unsold.

In 2012/2013, imports are expected to increase to 530,000 bales versus 300,000 balesthe previous year. Imports will bridge the gap between the expected decline in production and the expected increase in domestic consumption. Post expects that the GOE will grant import permits by Fall 2012 and likely will not ban cotton imports in 2012/2013.

The cotton import ban was clearly contrary to Egypt’s WTO obligations. On March 18th, 2012, the Minister of Agriculture and Land Reclamation (MALR) signed Decree 438 to once again permit the importation of cotton from all origins. Cotton importation was banned on October 24th, 2011, followed by another decision on November 22nd, 2011 that eased and gave exceptions forthe importation of cotton. However, although the cotton ban was “officially” lifted based on the Ministerial decree number 438, no import permits have been granted since March 18th, 2012.