Required Report - Public distribution

**Date:** 4/29/2008

**GAIN Report Number:** EG8009

EG8009

**Egypt**

**Cotton and Products**

**Annual**

**2008**

**Approved by:**

![](media/image1.wmf)Peter Kurz

U.S. Embassy

**Prepared by:**

Chris Rittgers & Sherif Ibrahim

**Report Highlights:**

Total cotton area in 2008/09 is forecast to decline. While exports are
expected to increase significantly, imports are expected to increase
slightly.

Includes PSD Changes: Yes

Includes Trade Matrix: Yes

Annual Report

Cairo \[EG1\]

\[EG\]

Table of Contents

[PSD 3](#psd-1)

[Area Planted and Production 3](#area-planted-and-production)

[Consumption and Utilization 4](#consumption-and-utilization)

[Prices 4](#prices)

[Trade 4](#trade)

[Trade Matrix 5](#trade-matrix)

[Stocks 5](#stocks)

# PSD {#psd-1}

<table>
<colgroup>
<col style="width: 13%" />
<col style="width: 8%" />
<col style="width: 10%" />
<col style="width: 10%" />
<col style="width: 9%" />
<col style="width: 10%" />
<col style="width: 9%" />
<col style="width: 8%" />
<col style="width: 9%" />
<col style="width: 10%" />
</colgroup>
<tbody>
<tr class="odd">
<td colspan="10"><p><strong>PSD Table</strong></p>
<p><strong>Cotton</strong></p>
<p>(HECTARES)1000 480 lb. Bales(PERCENT)(KG/HA)</p></td>
</tr>
<tr class="even">
<td></td>
<td>2006</td>
<td>Revised</td>
<td></td>
<td>2007</td>
<td>Estimate</td>
<td></td>
<td>2008</td>
<td>Forecast</td>
<td></td>
</tr>
<tr class="odd">
<td></td>
<td><p>USDA</p>
<p>Official</p></td>
<td><p>Post</p>
<p>Estimate</p></td>
<td><p>Post</p>
<p>Estimate</p>
<p>New</p></td>
<td><p>USDA</p>
<p>Official</p></td>
<td><p>Post</p>
<p>Estimate</p></td>
<td><p>Post</p>
<p>Estimate</p>
<p>New</p></td>
<td><p>USDA</p>
<p>Official</p></td>
<td><p>Post</p>
<p>Estimate</p></td>
<td><p>Post</p>
<p>Estimate</p>
<p>New</p></td>
</tr>
<tr class="even">
<td><strong>Market Year Begin</strong></td>
<td></td>
<td>08/2006</td>
<td>08/2006</td>
<td></td>
<td>08/2007</td>
<td>08/2007</td>
<td></td>
<td>08/2008</td>
<td>08/2008</td>
</tr>
<tr class="odd">
<td>Area Planted</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
</tr>
<tr class="even">
<td>Area Harvested</td>
<td>246</td>
<td>246</td>
<td>246</td>
<td>250</td>
<td>214</td>
<td>231</td>
<td>0</td>
<td>0</td>
<td>200</td>
</tr>
<tr class="odd">
<td>Beginning Stocks</td>
<td>816</td>
<td>761</td>
<td>816</td>
<td>828</td>
<td>891</td>
<td>734</td>
<td>815</td>
<td>931</td>
<td>736</td>
</tr>
<tr class="even">
<td>Production</td>
<td>975</td>
<td>813</td>
<td>975</td>
<td>1050</td>
<td>725</td>
<td>970</td>
<td>0</td>
<td>0</td>
<td>840</td>
</tr>
<tr class="odd">
<td>Imports</td>
<td>550</td>
<td>630</td>
<td>438</td>
<td>550</td>
<td>635</td>
<td>114</td>
<td>0</td>
<td>0</td>
<td>120</td>
</tr>
<tr class="even">
<td>MY Imports from U.S.</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
</tr>
<tr class="odd">
<td>Total Supply</td>
<td>2341</td>
<td>2204</td>
<td>2229</td>
<td>2428</td>
<td>2251</td>
<td>1818</td>
<td>815</td>
<td>931</td>
<td>1696</td>
</tr>
<tr class="even">
<td>Exports</td>
<td>500</td>
<td>380</td>
<td>500</td>
<td>600</td>
<td>350</td>
<td>372</td>
<td>0</td>
<td>0</td>
<td>600</td>
</tr>
<tr class="odd">
<td>Use</td>
<td>1000</td>
<td>920</td>
<td>980</td>
<td>1000</td>
<td>950</td>
<td>690</td>
<td>0</td>
<td>0</td>
<td>750</td>
</tr>
<tr class="even">
<td>Loss</td>
<td>13</td>
<td>13</td>
<td>15</td>
<td>13</td>
<td>20</td>
<td>20</td>
<td>0</td>
<td>0</td>
<td>15</td>
</tr>
<tr class="odd">
<td>Total Dom. Cons.</td>
<td>1013</td>
<td>933</td>
<td>995</td>
<td>1013</td>
<td>970</td>
<td>710</td>
<td>0</td>
<td>0</td>
<td>765</td>
</tr>
<tr class="even">
<td>Ending Stocks</td>
<td>828</td>
<td>891</td>
<td>734</td>
<td>815</td>
<td>931</td>
<td>736</td>
<td>0</td>
<td>0</td>
<td>331</td>
</tr>
<tr class="odd">
<td>Total Distribution</td>
<td>2341</td>
<td>2204</td>
<td>2229</td>
<td>2428</td>
<td>2251</td>
<td>1818</td>
<td>0</td>
<td>0</td>
<td>1696</td>
</tr>
<tr class="even">
<td>Stock to Use %</td>
<td>55.2</td>
<td>68.53846</td>
<td>49.59459</td>
<td>50.9375</td>
<td>71.61538</td>
<td>69.3032</td>
<td>0</td>
<td>0</td>
<td>24.51852</td>
</tr>
<tr class="odd">
<td>Yield</td>
<td>863</td>
<td>720</td>
<td>863</td>
<td>914</td>
<td>738</td>
<td>914</td>
<td>0</td>
<td>0</td>
<td>914</td>
</tr>
</tbody>
</table>

## Area Planted and Production

Total cotton area in 2008/2009 is forecast to be 200,000 HA, compared to
231,000 HA in 2007/2008. Area continues to decline as a result of lower
export prices and less attractive returns. In 2008/09, further decreases
in both area and production are expected. These expected decrease are
mainly due to the continued price increases for local corn and rice, and
the jump in wheat prices, coupled with the decreases in cotton prices.
This has led farmers to replace cotton with more lucrative crops.

In 2008/2009, approximately 25 percent of the total cotton crop is
expected to be extra long staple (ELS) varieties (staple lengths of 1
3/8 inches and above), about the same percentage

as the previous season. The only ELS varieties are now Giza 88, Giza 86.
The remainder of the crop is comprised of long staple (LS) varieties
(staple lengths of 1 1/4 inches): Giza 80 and Giza 90. Every year the
government specifies certain varieties of cotton for each growing
region, and farmers are obligated to cultivate those varieties according
to their respective areas. The Ministry of Agriculture continues to be
the sole distributor of cottonseed.

# 

# Consumption and Utilization

For 2008/2009, total use is projected at 765,000 bales, reversing a
downward trend of previous years. Until a few years ago, the textile
industry's annual requirement of raw cotton averaged between 1.2 and 1.4
million bales.

## Prices

Market prices for the 2007/08 season were reported at LE 650 (\$ 118)
for Giza 86, LE 750 (\$136) for Giza 88, and LE 540 (\$98) for Giza 90
(prices are per kentar of 50 kg). This is compared to LE 750 (\$ 136)
for Giza 86, LE 900 (\$163) for Giza 88 and LE 650 (\$ 118) for Giza 90
varieties, in the 2006/07 season. As the above price data indicate,
local prices for most varieties continue to fall except for Giza 88,
leading to the decline in attractiveness of planting cotton.

# Trade

Exports in 2007/08 are expected to reach 372,000 bales, down from
500,000 bales in the previous year. Exports are forecast to rebound in
2008/09 due to the expected drop in global cotton export surpluses.

In 2007/2008, imports are forecast at 114,000 bales of short staple
cotton, mostly from Greece at reported price \$0.79 per LB C&F,
including fumigation at the loading port. Egypt also imported Acalla
cotton from Sudan at a reported price of \$ 0.55 per LB and Barakat at
\$.76 per LB. Imports for 2008/2009 are forecast to increase slightly to
120,000 bales.

Until recently, imports of U.S. cotton were permitted only from
California and Arizona as they were declared free from boll weevil.
However, sourcing U.S. cotton from other areas was allowed in 2007. In
2007, Egypt imported about 6,000 bales from U.S, out of which 3,879
bales were the Pima variety.

## Trade Matrix

+-------------------+--------------+-------------------+--------------+
| **Export Trade    |              |                   |              |
| Matrix**          |              |                   |              |
|                   |              |                   |              |
| Cotton            |              |                   |              |
+-------------------+--------------+-------------------+--------------+
| Time Period       | 2006         | Units:            | 2007         |
+-------------------+--------------+-------------------+--------------+
| Exports for:      |              |                   |              |
+-------------------+--------------+-------------------+--------------+
| U.S.              | 26.172       | U.S.              | 8.205        |
+-------------------+--------------+-------------------+--------------+
| Others            |              | Others            |              |
+-------------------+--------------+-------------------+--------------+
| Pakistan          | 100          | India             | 104          |
+-------------------+--------------+-------------------+--------------+
| India             | 94.552       | Pakistan          | 55           |
+-------------------+--------------+-------------------+--------------+
| China             | 50.123       | Italy             | 29           |
+-------------------+--------------+-------------------+--------------+
| Italy             | 41.628       | China             | 27           |
+-------------------+--------------+-------------------+--------------+
| Turkey            | 22.564       | Turkey            | 23           |
+-------------------+--------------+-------------------+--------------+
| S.Korea           | 17.188       | Emirates          | 21           |
+-------------------+--------------+-------------------+--------------+
| Emirates          | 13.596       | Switzerland       | 17           |
+-------------------+--------------+-------------------+--------------+
| Portugal          | 11.649       | Brazil            | 16           |
+-------------------+--------------+-------------------+--------------+
| Japan             | 11.622       | S.Korea           | 15           |
+-------------------+--------------+-------------------+--------------+
| Switzerland       | 10.215       | Portugal          | 11           |
+-------------------+--------------+-------------------+--------------+
| Total for Others  | 373.137      |                   | 318          |
+-------------------+--------------+-------------------+--------------+
| Others not Listed | 38.066       |                   | 45.795       |
+-------------------+--------------+-------------------+--------------+
| Grand Total       | 437.375      |                   | 372          |
+-------------------+--------------+-------------------+--------------+

# Stocks

Stocks are expected to decrease in 2008/09 as exports are expected to
increase.