WORLD TRADE  
ORGANIZATION  WT/CFMC/16* 
27 May 2008 
 
 (08-2464) 
 Original:   English 
  
 
DIRECTOR-GENERAL’S CONSULTATIVE FRAMEWORK 
MECHANISM ON COTTON 
 
Seminar on South-South Cooperation for Cotton Sector Development
 
 
22 November 2007 
  
At the initiative of Brazil, China and India, th e WTO Secretariat organized a  "Seminar on 
South-South Cooperation for Cotton Sector Devel opment", within the setting of the Director-
General's Consultative Framework Mechanism on Cotton, on 22 November 2007.  Key working 
presentations were made by Brazil, China, India, Eg ypt and the International Trade Centre (ITC).  At 
the request of participants, the presentations  are circulated in this working document.
1  The exchange 
of views amongst participants at the Seminar is reflected in the 5th Secretariat Progress Report to the 
Sub-Committee on Cotton.2   
 
                                                      
* This document has previously been issued under the symbol WT/L/710. 
1 The only changes to the original presentations are editorial.   
2 TN/AG/SCC/W/9. WT/CFMC/16 
Page 2  
 
  Statement by Brazil
3 
  
1. This Seminar is an opportunity for Brazil to pr esent its own experience in the area of cotton 
development.  It is the intention of Brazil to outlin e what it has done in this area, and to provide its 
proposals for cooperation covering the whole cotton production chain.   
 2. Brazil has been recognized as an  agricultural power.  Cotton has become one of its most 
important products during the last few years.  It is a very good example because after opening up its 
market to the global economy, after 1990, Brazil became a major importer of cotton.  
 
3. Brazil managed to revive its cotton production by investing in research and pursuing the 
development of technology adapted to local conditio ns.  An important development was that cotton 
producers in Brazil  realized they needed technology in order to be competitive.  Based on efforts by 
the public and private sectors alike, and increased i nvestment, Brazil shifted from being an importer to 
an exporter of cotton.  
 4. In addition to the increase in  cotton area cultivated, Brazil has managed to enhance its 
production by increasing yields.  Brazil's cotton yields have been rising by an average of five to 10 per cent annually.  Last year, its cotton yields rose by 5.6 per cent.  Brazil considers that Africa too 
could benefit from finding a solution to the problem of yield stagnation.   
 
5. Brazil intends to share its technology with A frican countries. To this end, the Brazilian 
Research Corporation has recently opened an office in Accra, Ghana, with a mandate for Africa, 
particularly the West African countries.  Cotton is one of its major crops, and Brazil is willing to spare 
no efforts in this area.  Even before opening the office in Accra, Brazil had already started giving 
assistance by providing training to increase yields and production.  Brazil invested heavily in training 
in the early 1970s and 1980s in order to develop its  capacity for change.  Brazil decided that training 
would be of great importance at the start of the process.  Training programmes have been organized 
for technicians and agricultural researchers in Afri can countries.  There are plans to increase these 
training programmes.   
6. Brazil is prepared to make available its new co tton-seed varieties, most of them resistant to 
disease.  Disease-resistant seed varietie s have been critical to Brazil's efforts to improve yields.  In 
addition, Brazil is also prepared to share ecologi cal practices in the field, aimed at making production 
more environmentally friendly, and it plans to star t organizing, under the umbrella of its office in 
Accra, training programmes that are specif ic to the whole cotton production chain.  
 
7. After increasing cotton yields and improving competitiveness, Brazil took the important step 
of transferring cotton processing to producers by setting up various types of small and medium 
processing plants.  Thanks to this practice, Brazil ha s enhanced the value of its farm products and the 
profitability of production.  These practices could be made available in Africa.    
8. Furthermore, Brazil is prepared to extend its assistance by transferring many other 
technological advances in the field.  Since tec hnologies need to be tested and adapted to each 
situation, Brazil plans to assist African countries by  testing and comparing its seed varieties with 
Africa's.    
                                                     
 
3 The presentation was made by Dr. Claudio Bragantin i, head of the Brazilian Research Corporation, 
Accra, Ghana.  WT/CFMC/16 
 Page 3 
 
 
  9. Brazil is willing to share technology with least  developed countries and Africa.   Brazil is 
probably one of the first developi ng countries to open an office in Africa under the umbrella of South-
South cooperation.  The Government of Brazil plan s to make available the technology developed by 
its governmental research institution in Accra free of a ny royalty or charge to African countries.  This 
is work in progress. 
 
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  WT/CFMC/16 
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  Statement by India
4 
  
10. India is privileged to participate in this im portant and timely Seminar aimed at promoting 
cooperation among developing countries.  The destini es of India and Africa have been linked both by 
history and culture.  The relationship between India and Africa is one of fraternal solidarity.  Given 
the tremendous amount of political goodwill and understandi ng existing between India and Africa, it 
is natural that the ideas of South-South coopera tion and collective self-reliance are gaining firm 
ground.    
11. Since 1964, India has shared and continues to share its expertise, experience and technology 
with its partners in Asia, Africa, Latin America, Central Asia, the Gulf States, Small Islands in the 
Pacific and Caribbean region, under the Indian Technical Economic Cooperation (ITEC) Programme, 
and the Special Commonwealth Assistance for Africa Plan (SCAAP).  These two cooperation programmes currently cover 156 countries. 
 
12. In India, agriculture is the main source of livelihood for more than 60 per cent of the 
population, which is dependent on agriculture.  Agriculture remains important for a number of 
reasons.  Firstly, in terms of contribution to the GDP, more than one half of such contribution is 
accounted for by agriculture.  Secondly, according to  estimates made in 2004-2005, one half of the 
total number of persons in the workforce was employed in agriculture.  Thirdly, the agriculture sector 
contributes one fifth of total exports.  Fourthly, the sector provides raw materials to several crucial 
industries, such as cotton, textiles, jute, sugar and paper.    
Cotton Scenario in India 
 
13. India hopes that its cotton development experien ce will be found useful by its C4 partners. 
India considers that its experience will assist the C4 to seek need-based and target-oriented specific 
assistance, keeping in view India’s strengths in th e cotton sector.  In India, there are nine major 
cotton-growing states which are divided into three di verse agro-climatic zones:  the North Zone;  the 
Central Zone;  and the South Zone.  Nearly 65 per cent of the cotton crop is grown under rain-fed 
conditions.  Cotton, the most important fibre crop for India, plays a dominant role in its agrarian and 
industrial economy.  It is the backbone of its textile  industry, accounting for 70 per cent of total fibre 
consumption in the textile sector, and 38 per cent of the country's export, totalling about 
US$10 billion.  The area under cotton cultivation in I ndia is approximately 9.1 million hectares.  This 
is the largest cotton area in the world, or 25 pe r cent of the world cotton area.  Cotton in India 
employs seven million people.   About 60 million peop le depend on cotton and the textile industry for 
a living. 
  14. Overall, cotton production in the country has increased from 19.2 million bales in 2005-2006 
to 21 million bales in 2006-2007.  The average yield in India has increased from 88 kg of cotton lint per hectare in 1950-1951 to 465 kg of cotton lint per hectare in 2004-2005.  However, this average kg/lint per hectare is still lower than the world av erage of 550 kg/lint per hectare.  The demand for 
cotton in India is growing at 4 per cent per annum .  In order to reduce the gap between demand and 
production, 10-15 per cent of cotton was imported in recent years.    15. On cotton-related research and development ins titutional set-up in India, the Indian Council 
of Agricultural Research (ICAR) acts as a reposito ry of information and provides consultancy on 
agriculture, horticulture, resource management, animal  sciences, agricultural engineering, fisheries, 
agricultural extension, agricultural education, hom e science and agricultural communication.  ICAR's 
mandates are to coordinate agricultural research and development programmes and also to develop 
                                                     
 
4 The statement was made by Mr. Sunjay Sudhir, Counsellor, Permanent Mission of India to the WTO.    WT/CFMC/16 
 Page 5 
 
 
  linkages at the national and interna tional level with related organizati ons to enhance the quality of life 
in the farming community.    16. ICAR has established various research centres in  order to respond to the agricultural research 
and educational needs of the country.  It is activ ely pursuing human resource development in the field 
of agricultural sciences by setting up agricultu ral universities spanning the entire country. The 
Technology Intervention Programmes also form an inte gral part of ICAR's agenda.  The ICAR system 
has developed and produced more than 2,300 high-yieldi ng varieties and hybrids so far.  In all, 452 
high-yielding varieties and hybrids of various fiel d crops were released for general cultivation during 
1992-1996, including 40 for cotton.  Research in post -harvest technology of cotton, jute and lac, is 
being conducted at three institutes.   
 17. The Central Institute for Cotton Research (CICR) under ICAR has the mandate to:    
 
• conduct basic and strategic research on cotton to improve yield, fibre quality and by-products;  
 
• create new genetic variability for location-specific adoption in cotton-based cropping 
systems;   
 
• collect, conserve, evaluate and catalogue cotton germ plasm;   
 
• develop appropriate farming/cr opping systems for different cotton-growing zones and their 
effective soil fertility management;   
 
• develop effective and efficient disease and pest management strategies;   
 
• coordinate network research and assist in the transfer of modern cotton production technology 
to various user agencies;  and 
 
• extend consultancy and links w ith international agencies. 
 18. The Central Institute for Research on Cotton Technology (CIRCOT) under ICAR is engaged 
in research and development activities in cotton t echnology.  It has coordinated the release of 
improved cotton varieties, evaluate d germ-plasm material , developed norms for test methods, worked 
on utilization of agro-waste for paper, particle boa rd, biogas, mushroom, surveyed ginning factories, 
etc.  CIRCOT offers consultancy in the fields of  setting up testing laboratories, utilizing cotton stalk 
and textile processing wastes for value-added produc ts, and solving problems in the mechanical 
processing of cotton.   
 
19. The Indian Agriculture Research Institute (IARI) is the country's leading national institute for 
agricultural research, education and extension. It has concentrated on improving varieties including 
cotton and parental lines with improved fibre qu ality. The emphasis in germ-plasm enhancement 
activity has generated promising lines and in-breds  possessing different sets of fibre quality traits, 
such as fibre length, strength and compatibility to high-speed spinning coupled with disease resistance 
and responsiveness to integrated insect  and pest management practices.  
 20. India launched a Technology Mission on Cotton (TMC) in 2000.  The purpose was to:  
  
• improve the yield and quality of cotton by developing better cotton varieties through 
improved seeds and integrated water, nutrient and pest management technologies and their 
transfer to farmers;   
 WT/CFMC/16 
Page 6  
 
  • increase the income of cotton growers by reducing the cost of cultivation through transfer of 
technology to the growers, and hence increasi ng the production and availability of cotton for 
internal consumption and exports;  and 
 
• improve the quality of cotton and cotton-pro cessing facilities by upgrading/modernizing the 
existing ginning and pressing factories, so as to  achieve cotton processing with minimum or 
no contamination and better value- added products like yarn, cloth, garments, made-ups, etc.    
 21. To fulfil the above objectives, four mini-mis sions were established under the Technology 
Mission on Cotton.  These were:  (a) Cotton Research  and Technology Generation; (b) Transfer of 
Technology and Development; (c) Improvement of Marketing Infrastructure;  and 
(d) Modernization/Upgrading of Ginning and Pressing Factories.  
 
22. India is also increasing the use of Information Technology (IT) in agriculture to improve the 
working of the delivery mechanism, and assist th e farming community to enhance productivity of 
their crops through better farming practices.  A scheme for bringing e-governance to the Directorates and  Field Units of the Department of Agricultu re and Cooperation (DACNET) commenced in 2001.   
Its aim is to strengthen informatics to bring e- governance in 40 Directorates/Attached/Subordinates  
offices  of  the Department of Agriculture and Cooperation (DAC)  and their   200  Field  Units.   The 
scheme is being executed by the National Informatic s Centre.  The focus is on increasing value in the 
DAC and enhancing its relationships with its age nda of e-governance.  This is being done through 
integration of Government Functi ons (G2G), integrating Agri-Business Partners (B2B), connecting 
farmers (C2C), empowering employees, enhancing government productivity and value, and financial 
services.  Detailed information will be shared with interested delegates.   
 23. At the 8
th Round of the Director-General's Consultative Framework Mechanism on Cotton, 
the C4 and several African delegates expressed in terest in obtaining information on the area under 
cotton cultivation in India and India’s experiences of growing Biotech (BT) and organic cotton.  The 
relevant information will be provide d to the delegates of Côte d’I voire and the C4 who had initially 
indicated their interest.     24. With regard to recent developments in deployin g new BT cotton varieties in India, in 2002, 
India approved Biotech cotton for commercial farming.  The total BT cotton area planted in the 
country has increased from 6.2 per cent in 2004- 2005 to 39 per cent in 2006-2007.  According to a 
study conducted by IMRB International, of the 9.1 million hectares under cotton cultivation in India, 
about 3.56 million hectares are under certified BT cott on cultivation.  The study revealed that BT 
cotton seeds provided better return on investments to farmers compared to other hybrids.  It is hoped 
that this new technology will help  improve living standards for a wide cross-section of the Indian 
population.  Numerous studies have documented the economic and environmental benefits of growing 
BT cotton.  A recent nationwide survey of more th an 3,000 farmers by AC Nielsen found that for BT 
cotton farmers in India, profits increased by 78 per cent, on average, over farmers who planted traditional varieties, yields increased by 29 per cent on average, and pesticide use declined by 60 per 
cent.     Organic Cotton  
 
25. India is a world leader in the production of organic cotton.  Organic farming is fast gaining 
ground in India.  It is expected that the country  will be the leader in 2006-2007, with a record 
production of organic cotton.  India’s production of organic cotton in 2006 was estimated at 
10,000 tonnes and expected to reach 14,000 tonnes this year.  Although India ranks among the top 
five cotton producers, the output of organic cotton is pegged at less than 3 per cent of the nation’s  WT/CFMC/16 
 Page 7 
 
 
  overall cotton production. It is estimated that th ere are about 30,000 organic cotton growers in the 
country, the majority of them in Maharashtra and Gujarat.   
Value Addition 
 
26. In 2005-2006, the share of textiles exports including handicrafts, jute, and coir in India’s total 
exports was 16.63 per cent.  India’s textiles exports  have registered strong growth in the post-quota 
period (following the expiry of the Agreement on Te xtiles and Clothing).  Textiles exports grew from 
US$14 billion in 2004-2005 to  US$17 billion in 2005-2006, recording a growth of 21.77 per cent.  
Therefore, the Government has fixed a higher targ et of US$19.73 billion fo r the year 2006-2007.  
Cotton textiles, yarn, fabrics and made-ups constitute more than two thirds of India’s exports of all 
fibres/yarns/made-ups.   
Agro Industries 
 
27. India informs participants at this Seminar th at the first Global Agro-Industries Forum (GAIF) 
will be organized in New Delhi, from 8-11 April 2 008.  The Forum is jointly organized by FAO, 
UNIDO, IFAD and the Government of India.  It is  widely recognized that a key challenge is to 
develop agro-industries and associated enterprises.  These enterprises would be inclusive of smaller-
scale producers and those involved in processing, for better delivery of products at lower prices for consumers.  At the Forum, the role of agro-indus tries in enhancing productivity and profitability in 
agriculture, employment generation and poverty allevi ation, especially in developing countries, would 
receive attention.  The details of the Forum may be accessed by visiting the link 
http://www.gaif08.org
.   
 28. In conclusion, India reiterates its continuing  commitment to extend all possible assistance, 
within its limited resources, to all its partners  in general and to the C4 in particular.  
  
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Statement by China
5 
  
29. China is pleased to attend this Seminar on South-South Cooperation for Cotton Sector 
Development held back to back with the Global Review of Aid for Trade, which was successfully 
concluded yesterday.  This meeting is opportune and of special significance.   
 30. As requested, China's presentation will focus on th ree parts:  first, China's aid to African 
countries in the cotton sector;  second, China's expe rience and practices in cotton planting and plans 
for cooperation with African countries;  and th ird, China's experience and practices in cotton 
processing, and future plans for cooperation with A frican countries, specifically on Benin and Mali.   
 
China Fully Supports the Aid for Trade Initiative 
 
31. Modest improvements have been made in trade-related technical assistance and capacity 
building for developing countries since the launch of the Doha Round.  However, this assistance falls 
far short of needs.  As an effective supplem ent to the Doha Round, the Aid for Trade work 
programme was approved by the 2005 WTO Hong K ong Ministerial Declaration – a concrete step 
forward from years of efforts.  China fully supports  the Ministerial Decision to assist the developing 
and least developed countries to address the pr oblems of weak infrastructure and insufficient 
international trade capacity, so that they can eff ectively implement WTO Agreements and beneficially 
engage in international trade.    
China's Cooperation with African Countries in the Cotton Sector  
 
32. China and African countries enjoy time-honour ed friendship.  China pursues a line of 
peaceful development and intends to develop frie ndly ties with African countries following the basic 
principles of respect for sovereignty, equality and mutual benefit.    33. Cotton is of high importance for the African countries. Over 10 million people in West Africa 
depend for their livelihood directly or indirectly on cotton production.  Cotton exports account for 
77 per cent of the total exports of Benin, and 18 per cent of Mali.  China fully understands the 
importance of cotton for the African countries.  Fo r a long time, China has provided aid in various 
forms to promote the development of the cotton and textile industry in Africa.  
  
Trade in Cotton 
 34. In 2006, China imported cotton from African countries totalling US$725 million, 7.1 per cent 
above the previous year.  Out of this amount, cotton imports from Benin totalled US$82.07 million, 
cotton imports from Chad totalled US$29.48 million, with cotton imports from Mali and Burkina Faso totalling US$107 million and US$193 million, respectiv ely.  Furthermore, China provides duty-free 
treatment to most of the products exported by the 41 LDCs having diplomatic relations with China.  
These products include cotton, textile and clothing  products, accounting for 93 per cent of the total 
export volume of these LDCs to China. Thes e measures promote trade balance and healthy 
development of economic relations between China and these countries.  
 
                                                     
 
5 Statement was made by Ms. Chai Xiaolin, Deputy  Director-General, Department for WTO Affairs, 
Ministry of Commerce, People's Republic of China.    WT/CFMC/16 
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  Aid Projects in the Cotton Sector 
 
35. China's aid programmes to African countries are primarily delivered through the provision of 
financial resources, investments, preferential lo ans and training programmes in the cotton sector: 
 
(a) Financial resources and in-kind assistance:  The Chinese Government has financed 
more than 20 cotton and textile projects, as well as providing agricultural machines, fertilizer and pesticides.  
  
(b) Investment:  by the end of 2006, China has invested a total of US$18.63 million in 
the African textile industry.   
 
(c) Preferential Loans:  the Chinese Government  began to provide preferential loans to 
African countries in 1995.  Under the arrange ment of preferential loans, Chinese 
companies actively cooperated with recipients and developed some large-scale 
projects in the cotton and textile industry .  These projects greatly enhanced local 
employment and increased the fiscal tax reve nue of local governments.  The Benin 
Textile Company (CBT) is a good example.  
  
(d) Training: China has actively developed t echnical assistance and training programmes 
for the textile industry to African countries to enhance their cotton-processing level 
and textile production techniques. From 2005 to 2006, the Ministry of Commerce of 
China held six textile industry workshops  for African countries, and 117 African 
textile officials participated in the wo rkshops. In October 2006, MOFCOM held a 
"Seminar on  International Trade in Textiles" .  Thirteen Ministerial level officials 
from seven African countries, includi ng Benin, attended the seminar.  
 
36. China has provided aid in the cotton sector to many African countries.  For instance, aid has 
been provided to Uganda with the installation of Chinese equipment in a new processing factory.  In 
West Africa, China has exported over 40 sets of equi pments to major cotton-producing countries such 
as Nigeria and Ghana.  Aid to Benin and Mali in the cotton sector is considerable and illustrative. 
   Benin
 
 
37. The primary forms of aid to Benin are providi ng materials and supplies such as agricultural 
machines, fertilizer and pesticides, as well as build ing the Lokossa Textile Co mpany with preferential 
loans. 
 
38. At the end of June 2007, the Chinese Government  had provided agricultural inputs to Benin, 
in the amount of RMB 15 million.  In recent years, aid in this field has been intensified.  For example, 
RMB 8 million worth of agricultural equipment and resources were provided to Benin in 2006.  39. According to the Preferential Loan Framework Agreement jointly signed by China and Benin 
on 18 June 1998, China provided RMB 150 million worth of preferential loans to Benin. This loan 
was used to jointly establish the CBT by China and Benin.  CBT is the biggest textile company in 
Benin.  
Mali
 
 40. The primary form of aid was the establishment of the Segou Textile Mill.  In 1994, a joint 
venture, COMATEX S.A. ( Compagnie Malienne des Textiles S.A. ) was established. 
  WT/CFMC/16 
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  China's Experience and Future Sino-Afric an Cooperation for Cotton Production 
 
41. China has advanced practices and experience in  cotton production.  Compared with normal 
cotton yield of 300 to 400 kilograms per hectare in W est Africa, China's yield of cotton approximately 
averaged 1,200 kilograms per hectare.  China's production experience includes:  
 
- selecting the right location.  In recent years, China's cotton planting area has 
been maintained at a level over 5 m illion hectares, mainly in the following 
three major producing areas which cover 13 provinces:  the Yellow River Valley, the Yangtze River Valley and the Northwest Inland area;  
 
- improving soil utilization;  
  
- scientific seed breeding and selection.  Thus far, China has promoted six 
variety renewals.  These have greatly  facilitated the development of cotton 
production;  and 
 
- innovating key technologies.  These technologies include seed delinting and 
coating, nutritive bowl breeding and transplanting, film mulching, chemical regulation and control, dripping irri gation under mulching film, diseases and 
pests control, scientific fertilizing, m echanical harvesting, innovative ginning, 
etc.   
 42. There is great potential for cooperation between China and Africa in seed breeding, technical 
training and cotton production through joint efforts.  China's Experience and Current Sino-Afr ican Cooperation for Cotton Processing 
 
43. The main feature of China's cotton processing t echnology is to best utilize resources and to 
increase added value, as much as po ssible.  This has been well illustrated by the corporate philosophy 
of Chinese companies – "Add More Value to Cotton! "  Chinese manufacturers are ready to transfer 
their advanced, reliable and patented technologies to African countries.   
 
44. After 50 years of development, a complete and advanced industry system has been set up with 
regard to China's cotton processing technology and m achinery. The system can be divided into three  
components:  ginning, delinting, and cotton-seed oil and protein extraction.    
45. In future Sino-African cooperation plans, trai ning and research are important.  It will be 
useful for the improvement of cotton production a nd quality in West Africa and the promotion of 
bilateral exchanges to establish training and ex change centres.  Chinese enterprises are making 
tremendous efforts in this respect.  For instance,  Chinese Cotton Industries Ltd. has submitted to the 
West African Development Bank:  " The Project Proposal for Research on the Development of the 
West African Cotton Industry" .  This proposal involves detailed cooperation suggestions concerning 
cotton production, processing, by-product processing, textiles, and related trade.  The West African 
Development Bank is giving priority attention to this proposal.    46. There is considerable potential in Sino-West  African cooperation in the cotton by-product 
processing industry sector.  West Africa provides rich raw materials for cotton-seed processing.  For 
example, in the UEMOA economic area alone, on th e basis of cotton production of 750,000 tons in 
2005-2006, 1.12 million tons of un-delinted seeds we re produced, from which about 110,000 tons of 
short fibres (linters) and 400,000 tons of cotton-seed  protein could be expected.  However, due to 
limitations of traditional technologies, these resources have not been efficiently utilized in the West 
African area, resulting in waste and losses.  China' s advanced production technology can help to fill  WT/CFMC/16 
 Page 11 
 
 
  this gap in West African cotton industry, upgrade technical levels, increase added value of cotton by-
products, and improve people's living conditions.    47. In both the traditional cotton-processing indust ry and the more recent cotton by-product 
processing industry, the promotion and application of  China's technologies could add more value to 
the cotton industry in West Africa, promote its t echnical progress and international competitiveness, 
and bring a win-win future for Sino-Africa cooperation.    48. The last 30 years of reform and opening-up has helped China promote trade and economic 
development. Nevertheless, China is still a developing country and is under many constraints, which 
has limited its ability to increase its foreign aid.  Ch ina will continue to attach great importance to aid 
for the cotton sector in Africa and broaden its ec onomic and technological cooperation with African 
countries through various forms of forei gn aid with maximum flexibility.   
 
 
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 WT/CFMC/16 
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  Statement by Egypt
6  
  
Egyptian Cotton Sector Reforms  
49. An overview of the reforms carried out in the cotton sector serves to highlight the importance 
of cotton in Egypt.  Cotton production involves over half a million rural households in Egypt, 
employing half a million workers and, indirectly , through multiplier effect generates over one million 
additional jobs.  In 2006, cotton textile exports generated over US $1.4 billion, of which cotton lint 
accounted for about US$200 million of these exports , the higher value-added manufacturing products 
accounting for the balance.  
 50. The area under cotton cultivation for the 2007-2008 season was approximately 
580,000 Fedd. , or the equivalent of 243,600 hectares.  Egypt's average production amounts to 220,000 
metric tonnes of lint.  The yield average is 380 kg of cotton lint per Fedd . (903 kg/hectares).  Egypt's 
consumption is about 200,000 metric tonnes annually  (of which 50 per cent is domestically produced 
Egyptian cotton, while the other 50 per cent is impor ted cotton).  Egypt exports about 100,000 metric 
tonnes of cotton lint annually.  An increase is expected this year.  51. The three varieties of Egyptian cotton are:  
 
• ELS (Extra Long Staple):  this type is over 1 ⅜ inches, planted in the lower Egypt Delta.  It 
represents 18 per cent of the cotton area.  This variety of cotton is called Giza (88,78,45).   
 
• LS (Long Staple):  this type is between 1¼ inches and 1 ⅜ inches.  It is planted in lower 
Egypt.  It represents 61 per cent of the cotton ar ea.  This variety is called Giza (86,89,85).  
 
• Longest Staple:  this type is between 1¼ inches and 1 ⅜ inches.  It is planted in Upper Egypt.  
It represents 21 per cent of the cotton area.  The two varieties are called Giza 80 and Giza 90. 
 
52. Since 1991, Egypt has actively promoted the lib eralization and privatization of Egyptian 
cotton under a package of economic reforms:  (i) all controls of foreign exchange have been 
dismantled; (ii) private ownership in public sector  banks is at the 70 per cent threshold and banking 
privatization has been accelerated;.  and (iii) all banks are required to abide by the Basel convention 
on controls in relation to their clients.  
  53. Agricultural reform measures have been undertak en.  These were initiated before 1990.  They 
include:  (i) removal of controls on farm gate prices ;  (ii) removal of private sector constraints for the 
import and export of agricultural crops ;  and (iii) limiting the role of the Ministry of Agriculture and 
Land Reclamation in agricultural research.  Most agri cultural research is curre ntly undertaken by the 
private sector.   
 54. The strategy for agricultural development has several aims.  These include: (i) optimization of 
crop returns per unit of land and water;  (ii) increase of agricultural land by 3.4 million Fedd . so as to 
achieve 4.1 per cent growth in agricultural pr oduction while ensuring sustainable production;  
(iii) environmental protection;  and (iv) expans ion of foreign exchange income from agricultural 
exports.  
                                                     
 
6 The Egyptian statement was made by Mr. Nab il El-Morsefawy, Representative of the Cotton 
Exporters Union.    WT/CFMC/16 
 Page 13 
 
 
  55. These agriculture strategy objectives are based on new high-yielding varieties and reduction 
in the use of pesticides and chemi cal fertilizers, through the use of biological controls as part of an 
Integrated Pest Management (IPM) programme.  These are expected to minimize the cost of 
production, improve product quality and increase competitiveness in th e export market.  
 
56. In 1994, the Egyptian Government issued a ne w legal framework aimed at the liberalization 
of internal and foreign cotton trade.  The three bodi es established for this purpose were:  (i) General 
Committee for organizing local cotton trade;  (ii) Alex andria Cotton Exporters' Association;  and, (iii) 
Cotton Spot Market in Alexandria.    
57. The General Committee for local cotton is respons ible for organizing the domestic market.  It 
is also entrusted with the task of settling disputes between dealers in relation to the price of cotton, 
which is set according to supply and demand forces.    58. The Alexandria Cotton Exporters' Association is responsible for promoting the export of 
Egyptian cotton.  It  is entrusted with the task of settling disputes between e xporters and importers.   
 59. The Cotton Spot Market in Alexandria minimi zes the procedures for cotton export trade.  
However, it closed in 2007 as no transaction ha d been settled through it for several years.  
 60. The Government has also taken several steps to  reform the cotton sector and other sectors in 
the country in order to privatize and restructure the cotton industry.  For this purpose, the following 
measures were adopted:    
(a) Access to the Stock Market .  The Arabic Ginning and Cotton Trading Company is 
an example of successful privatization of an  Egyptian company.  It was privatized in 
1997.  It modernized its ginnery, installe d the pressing of cotton in the ginnery in 
order to export cotton directly from the ginning mills to the ginning factories.  It is now a holding company with several affilia ted companies in spinning, ready-made 
garments and cotton trade and export.  Othe r successful privatizations include the 
Alexandria Spinning and Weaving Company and the Arabic Spinning Company.  
 
(b) Anchor Investor (Majority Investor) .  One successful example of an anchor 
investor is the investment made in the "Mostord Spinning Mill" by a Korean company, which acquired 100 per cent of the company.  The quality yarn produced by this company accounts for about 15 per cen t of total Egyptian yarn exports.  Other 
companies such as "Shebin El Chom Spinning Mill" and "Mernia El Kamh Spinning 
Mill", have followed suit.   
 
(c) Sales as Productive Assets .  Under this arrangement, land and equipment are sold as 
units.  One such case is the "Cairo Silk Co mpany" which was separated into several 
units for dyeing, weaving and other functions.   
 
(d) Employee Share Holder Associations  (ESAs). 
   
(e) Liquidation .  A company is liquidated when it ceases its function.  Some examples 
include agriculture land reclamation, or afte r the land is sold to the private sector, or 
the company is not profitable.   
 WT/CFMC/16 
Page 14  
 
  New Cotton Industry Facilities 
 
61. In addition to these reforms, Egypt encourag es new cotton industry facilities.  There are 
several industrial zones such as the Borg-Ela rab (in proximity to Alexandria);  the 6
th of October;  
Saadat City;  and, 10th of Ramadan.   In these industrial zones, economic resources are available in the 
form of cheap industrial land, energy, human r esources, and raw Egyptian cotton.  These industrial 
zones are located in strategic geographical loca tions. The Government encourages foreign textile 
industry in these zones.  There are now several investors.  Two examples are "Setcore" and "European Mill".  These are joint venture establishments with Egyp t, involved in fine c ount spinning mills, using 
state-of-the-art management, technology and equipment.   
 
62. The Egyptian Government has adopted several measures with regard to human resources.  
These include:  early retirement;  re-allocation of resources;  and, retraining, an example of which is the 1998 European Union Five-Year Programme.  Unde r this programme, worker s are re-trained and 
adapted to other jobs.  A social fund has been established by Government and donor capital.  The 
purpose is to train, fund, and aid small enterprises.   
 
Cooperation with African Countries  
 
63. Egypt has carried out programmes for cooperati on with other African countries in areas such 
as:  (i) training centres in cotton fields;  (ii) gene ral cotton arbitration association;  and (iii) training 
centres for product classing, spinning mills, and ginning.  In addition, the Ministry of Agriculture and 
Land Reclamation has cooperated with other African countries.   64. Egypt has also focused on organic cotton cultiv ation.  The cultivation of organic cotton uses 
natural fertilizers and organic pesticides.  Cotton- producing countries should be encouraged to use 
natural fertilizers made from the residue of plants and animals which is allowed to ferment, and thus 
contribute to reducing the demand for chemical pesticides.     
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   WT/CFMC/16 
 Page 15 
 
 
  Presentation by the International Trade Centre7  
  
65. The International Trade Centre's (ITC) techni cal assistance programme on cotton puts strong 
emphasis on South-South cooperation.   
 
Five-Step Market-Oriented Approach for Cotton Competitiveness   
 
66. The ITC has five approaches to cotton competitiveness.  These areas encompass:  
 
• Trade Capacity Building/Cotton Exporter's Guide; 
 
• Capacity Building for Cotton-Specific Trade Support Institutions;  
 
• Cotton Training through South-South Cooperatio n with developing countries that have 
successfully developed their cotton industry; 
 
• Value Chain Connection through South-South Cooperation with developing countries that 
have developed an important tex tile and clothing industry;  and 
 
• Market Understanding and Promoting African Cotton to Asia's Textile Industry.   
 67. For cotton enterprises to become competitive, th ey need to understand the market, the buyer 
and the buyer's buyer.  This lesson from the market needs to be fully understood and applied by Africa.  The July 2005 China International Cotton Conference, in Urumqi, was illustrative.  There 
were 600 participants at the conference.  The objec tive of most participants was to sell cotton to 
China, as the biggest cotton market.  There were three participants from Africa:  one government 
official from Nigeria;  one government official from the Sudan;  and, one official from Egypt.  For Africa to be competitive in th e cotton market, it needed to better understand the markets.  
Traditionally, cotton is sold to traders.  It is essential, as part of the overall strategy by African 
governments, producers and traders, to understand th e needs and requirements of the actual cotton 
users.  It is also essential for all those involved in the cotton sector, including the cotton farmers, to be 
knowledgeable of the entire cotton value chain.  A comprehensive understanding of the entire cotton 
value chain is the logic underlying  ITC's approach and its full use is  needed to make the cotton sector 
competitive.    
68. Opportunities exist to learn from the experi ence and good practices of other developing 
countries, not only in the area of cotton but also in that of value addition to the cotton sector.  After 
the phase-out of textiles and clothing quotas, cotto n demand has been shifting to Asia.  The major 
markets for African cotton and for other cotton producer s are in Asia.  It is important, therefore, to 
understand the markets, import procedures and busin ess practices in countries su ch as China, Turkey, 
Bangladesh and Indonesia.  
 
First Step:  Trade-Capacity Building/Cotton Exporter's Guide   
 
69. Trade-capacity building and the preparation of the Cotton Exporter's Guide (CEG) are central 
in the work of ITC on cotton.  ITC has prepared the CEG with inte rnational organizations, academics, 
and traders. The principal actors have contributed  to this guide which targets producers, ginners, 
exporters and traders.  The Guide provides a value ch ain perspective.  It addresses the question:  What 
happens after farming?  Chapter 6 in the CEG is dedicated to the newly emerging markets in Asia:  
                                                     
 
7 The presentation was made by Mr. Matthias Knappe , Senior Market Development Officer, ITC.   WT/CFMC/16 
Page 16  
 
  China, Turkey, Bangladesh, Indonesia, Pakistan and Thailand, in order of market importance.  These 
are the most important cotton importing markets in the world.  The Guide discusses these markets and 
South-South trade opportunities, and ways on how to increase exports to these destinations.  
 70. An advance copy of the CEG was presented at the 66
th Plenary Meeting of the International 
Cotton Advisory Committee (ICAC), in Izmir, Tu rkey, from 22-26 October 2007.  The final English 
version will be ready in early 2008 and the transla tion into French and Spanish is under way.  ITC 
intends to provide training on all the aspects co vered in the Guide together with many of the 
contributors.  This is the first area of ITC's technical cooperation on cotton which is primarily based on South-South trade opportunities.   
 
Second Step:  Capacity Building for Co tton-Specific Trade Support Institutions   
 
71. The second area is capacity building for cott on-specific trade support institutions.  Africa 
needs strong cotton institutions.  ITC believes that it is very important to have an association or an 
institutional base at the national as well as sub-regi onal level, especially in Africa.  The African 
Cotton Association (ACA) was established with an all-Africa mandate.  However, the ACA needs to 
be strengthened at an institutional level.    72. An all-Africa approach is essential.  Frequent reference is made to West and Central Africa, 
but there are 36 countries in Africa that produce and trade cotton.  They need to be included in the 
overall approach.  The chances of Africa succeedin g in the cotton markets would be enhanced by 
unified action.    73. There are possibilities within Africa for South- South cooperation, based on the various 
countries with different experiences and developmen t.  Many possibilities exist, at least at the 
government level, for cooperation within Africa from East to West.  For in stance, in the area of 
organic cotton, two African countries, Uganda and Ma li, have practical experience to share.  Burkina 
Faso is exploring the possibilities for Biotech cott on.  These experiences could be shared with other 
African countries, and thus extend South-South coop eration between African countries.  The role of 
ITC is to facilitate such intra-African South- South cooperation as well as  cooperation with other 
developing countries in Asia, Latin Amer ica and Eastern Europe and the CIS. 
 
74. There are also possibilities for value addition with in Africa.  ITC has engaged in exploratory 
discussions with India, China, and Turkey on this  subject.  One possibility is to develop a regional 
approach.  Not all countries in Africa are likely to establish a full value chain of textiles, spinning and 
clothing factories in each country.  Investments are ne eded.  Different parts of the value chain exist to 
some extent within Africa, and could be linked toge ther to achieve a regional value chain that could 
be competitive against Asian competitors.    Third Step:  Cotton Training through South -South Cooperation with Developing Countries that 
have Successfully Developed their Cotton Industry  
 75. The third approach is cotton training through South-South cooperation.  China, India, Brazil, 
and Turkey, amongst others, have  developed successful cotton industries.  Their knowledge and 
experience could be usefully shared because, as de veloping countries, their environments are more 
similar to those in Africa than to Europe or America.     WT/CFMC/16 
 Page 17 
 
 
  76. So far, ITC has organized two training seminars in China in cooperation with the Ministry of 
Commerce;  and two training seminars in India in co operation with the Ministry of External Affairs, 
under the India Technical Economic Cooperation (ITEC) programme, and the Ministry of Textiles.  In 
both cases, China and India financed the entire programme for African participants.  ITC provided international expertise, selected the right partic ipants from the African countries invited, provided 
support and technical expertise throughout the traini ng programme and worked with participants on 
follow-up activities.  ITC would like to repeat this programme in China and India in 2008, subject to 
confirmation.  ITC is exploring the possibility of  organizing similar programmes in cooperation with 
Brazil and Turkey and possibly other countries.    Fourth Step:  Value Chain Transformation through South-South Cooperation   
77. The fourth area is value chain connection thr ough South-South Coopera tion.  Understanding 
quality requirements is key in competitiveness considerations.  ITC assists ginners, farmers, 
governments and traders to understand the quality requi rements of the textiles and clothing industry, 
mainly in Asia.  The textile industry is the direct  consumer of cotton and therefore African producers 
and traders need to develop a direct working relationship with them.  78. ITC provides assistance in building the capacity of countries to connect better the different 
stages of the value chain.  Asian investment in A frica could contribute to the objective of achieving 
the full value chain cycle in Africa.  The possi bilities are being examined.  For instance, the 
presentation by China indicated considerable po ssibilities for Asian investments in the textile 
industry.  Eligible African countries essentially en joy duty-free market access for their clothing 
industries under the African Growth and Opportunity  Act (AGOA) in the United States, and under the 
Everything But Arms (EBA) Initiative in the Europ ean Union.  The missing component for Africa is 
the textile segment in the value chain.  Asian inv estment could fill this stage of the value chain.  
 
Fifth Step:  Market Understanding and Promot ing African Cotton to Asia's Textile Industry   
 
79. At the heart of ITC's work is trade facilita tion, understanding the market, and promoting 
cotton, particularly African cotton.  After the phase- out of quotas for textiles and clothing, Asia is the 
main market for cotton.  ITC is working to assist African countries to promote their cotton exports to 
Asia.  Even though the bulk of African cotton is expo rted to Asia, international merchants  handle this 
trade.  For the exporters, the final destination and end-user are unknown.  80. ITC has sought to promote better market unders tanding for Africa, for example through the 
direct connection of African cotton traders with c onsumers in Asia.  In the Republic of Korea, ITC 
organized a two-week training seminar in coope ration with the Korea In ternational Cooperation 
Agency in November 2007.  The purpose of the seminar was to assist African participants to 
understand better the Korean market and to fully appr eciate the critical necessity of value addition.  
Trader/Producer interactions are important and we re facilitated by ITC.  This was one of the 
objectives the seminar sought to achieve.    
81. ITC continues to work on creating networks and partnerships for African cotton producers 
and traders and textile manufacturers in Asia.  Th e African Cotton Association (ACA) is involved in 
these efforts to build a sustainable institutional b ase within Africa that replicate the approach and 
disseminate the information widely across Africa.  ITC is planning to organize a one-week promotion 
of African cotton in Bangladesh, the third largest  import market for cotton.  ITC is engaged in 
exploratory discussions with the representative groups in Bangladesh (i.e. the Ministry of Textiles, the 
Bangladesh Textiles Manufacturers' Association, and the Bangladesh Cotton Association) and the 
African Cotton Association, to ensure  that the correct partnerships are made and the right participants 
are engaged so that the contacts can produce market results.   
 WT/CFMC/16 
Page 18  
 
  82. ITC intends to continue, on an annual basis if  possible, similar and advanced programmes for 
African cotton producers and traders in China, India, Turkey and the Republic of Korea.  ITC is 
further exploring the possibility of expanding th is programme of seminars, capacity building, 
networking and "match-making" for Africa with ot her countries within a South-South framework.  
The dividends are considerable.  
 
 
__________