Egypt'S Textile Industry Is In Trouble

Egypt has more than two times the price per kilogram of yarn.

In Egypt's textile capital, Al-Mahalla, Egypt.

"The government will inject funds into the troubled state-owned enterprises.

But they do not plan to inject money into private enterprises, "said Mohssen el-Gilani, chairman of the textile, textile, cotton and clothing holding company.

State owned enterprises lost 530 million Egyptian pounds in the 2010/11 fiscal year, compared with 2 billion 300 million pounds last year.

The fiscal year of Egypt began in July 1st.

El-Gilani said weaving, weaving,

"Holding companies hope that the government will take relief measures to solve the difficulties with fair yarn prices," he said.

According to the central agency's public mobilization and Statistics (CAPMAS) report, Egyptian cotton exports amounted to 2 million 200 thousand 2010/11 in fiscal year.

Domestic manufacturing enterprises consume 4 million metric tons a year to maintain production lines.

It is equivalent to 150 kilograms of cotton per kilogram, or 45 kilograms of cotton ginning.

China, India and Switzerland are the largest importers of cotton in Egypt.

Some people believe that domestic textile producers in Egypt are being squeezed by the soaring yarn prices and the nationwide store shelves in China.

Egypt's decades old textile industry is experiencing "a very critical situation", said Mohamed el-Morshedi, chairman of the textile industry association of the Federation of Egyptian industries.

"The domestic lint and cotton yarn output in Egypt can not meet the 1/3 demand of domestic textile enterprises.

Yarn and textile companies are under pressure, which threatens Egypt's largest labour intensive industry, "explains el-Morshedi.

Last September, the same yarn crisis hit Egypt's domestic textile industry, causing some manufacturers to withdraw from the market, because the price of yarn at home and abroad reached a record high.

According to him, cotton prices have reached the highest level since the American Civil War (1861-1865), when cotton prices rose from 10 cents / pound in 1860 to 1.90 dollars / pounds in 1863-1864 years.

The international cotton advisory board (ICAC) reported that global cotton prices actually declined in April, and the Cotlook A index dropped to 1.73 cents / pound from last month's record of 2.44 US dollars / pounds.

But prices remain at a very high level in history.

But the London based organization predicts that yarn demand will be reduced due to high cotton prices and chemical fiber competition.

The Egyptian factory was hit by a severe crisis of raw material shortage.

There is no market.

El-Gohari said that smuggling of clothing into Egypt poses the biggest threat to the Egyptian textile industry.

Ending smuggling is the first step to help the textile industry recover.

ICAC predicts that world yarn prices may fall next month, because the total supply of cotton in 2011 is expected to reach 196 million 650 thousand packages, while the total consumption is expected to be 155 million 250 thousand packages.