Egypt’s textile industry is in trouble
The price of yarn per kilogram in Egypt has more than quadrupled. About 51% of the textile factories located in the Al-Mahallael-Kobra delta city have ceased operations, and the remaining factories have gradually laid off their workforce.
In Al-Mahalla, the textile capital of Egypt, 650,000 workers in the Egyptian textile industry are facing unemployment. After the January 25 revolution, Egypt currently needs to make great efforts to promote the wheels of the economy.
“The government will inject funds into state-owned enterprises that are facing difficulties. But it has no plans to inject funds into private enterprises,” said Mohssenel-Gilani, chairman of the Woven, Textile, Cotton and Apparel Holding Company.
State-owned enterprises lost EGP 530 million in the 2010/11 fiscal year, compared with EGP 2.3 billion the previous year. Egypt’s fiscal year begins on July 1.
El-Gilani said the Weaving, Textile, Cotton and Clothing Holding Company has 32 subsidiaries of state-owned enterprises.
“The holding company hopes that the government will take rescue measures to solve the difficulties with fair yarn prices,” he said.
According to the report of the central agency Public Mobilization and Statistics (CAPMAS), Egyptian cotton exports reached 2.2 million quintals in the 2010/11 fiscal year.
Domestic manufacturing companies consume 4 million quintals every year to keep production lines running. Each quintal is equivalent to 150 kilograms of cotton, or 45 kilograms of ginning.
China, India and Switzerland are the largest importers of Egyptian cotton.
Some people believe that Egypt’s domestic textile manufacturers have been squeezed by soaring yarn prices and low-priced Chinese products flooding store shelves across the country.
Egypt’s decades-old textile industry is experiencing “a very critical situation,” said Mohamedel-Morshedi, president of the Textile Chamber of Commerce of the Federation of Egyptian Industries
“Egypt’s domestic lint and cotton yarn production cannot meet one-third of the needs of domestic textile companies. Yarn and textile companies are feeling the pressure, and this pressure threatens Egypt’s largest labor-intensive industry,” el-Morshedi explained.
Last September, the same yarn crisis hit Egypt’s domestic textile industry, causing some manufacturers to withdraw from the market as yarn prices at home and abroad hit record highs.
According to him, the current cotton price has reached the highest level since the American Civil War (1861-1865), when the price of cotton rose from 10 cents/pound in 1860 to $1.90/pound in 1863-1864.
The International Cotton Advisory Committee (ICAC) reported that global cotton prices actually fell in April, with the CotlookA index falling to 1.73 cents/pound from the highest record of $2.44/pound last month. But prices remain at historically high levels. But the London-based organization predicts demand for yarn will fall due to high cotton prices and competition from synthetic fibers.
Egyptian factories are hit by a serious crisis of raw material shortages. There is no yarn or cotton in the market. In time private factories have also closed. Industry insiders called on the government to take immediate measures to save the textile industry.
el-Gohari said smuggling clothing into Egypt poses the greatest threat to the Egyptian textile industry. Ending smuggling is the first step in helping the textile industry recover.
ICAC predicts that world yarn prices may fall next month as total cotton supply in 2011 is expected to reach 196.65 million bales, while total usage is expected to be 155.25 million bales.
Disclaimer:
Disclaimer: Some of the texts, pictures, audios, and videos of some articles published on this site are from the Internet and do not represent the views of this site. The copyrights belong to the original authors. If you find that the information reproduced on this website infringes upon your rights and interests, please contact us and we will change or delete it as soon as possible. </p
