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Egyptian govt hikes spinners' subsidy to EGP 500mn
23
Jul '14
The Government of Egypt has increased the subsidy provided to spinners from the current EGP 200 million to EGP 500 million for the current marketing season 2013-14, reports The Cairo Post.
 
The decision to increase the subsidy given to spinners on purchase of cotton was taken by the Cabinet to help revitalization of the Egyptian cotton and textile sectors, Minister of Industry and Trade Mounir Fakhry Abdel Nour said.
 
The objective of the Government is to encourage spinners and exporters to purchase Egyptian cotton, instead of importing the same, and thus revitalize the sector as a whole, he added.
 
As per the decision, spinners will get a subsidy of EGP 350 for each kantar (about 45-50 kg) of Egyptian cotton purchased during the current marketing season that ends on August 31. Similarly, exporters will also get a subsidy of EGP 200 for each kantar of Egyptian cotton exported by them.
 
Of the EGP 500 million set aside for subsidy, about EGP 350 million will be utilized to subsidize the spinning mills in the public and private sectors as well as the exporters. The remaining EGP 150 million will be utilized to support cotton growers by providing them with seeds and fertilizers at subsidized prices, Mr. Abdel Nour said.
 
The latest decision is expected to revive defunct spinning mills and also increase Egyptian cotton production by up to 1 million kantars, according to the Minister.
 
Previously, spinning mills were reluctant to purchase domestic cotton because of its high prices and the latest step is likely to bring the prices of domestic cotton at par with imported cotton.
 
During the second quarter of the current agricultural year, the purchase of domestic cotton by Egyptian companies dropped by 79.9 percent year-on-year to 81,600 kantars, according to the Central Agency for Public Mobilization and Statistics (CAPMAS).
 
During the quarter, cotton exports from Egypt also declined by 46.5 percent year-on-year to 126,600 metric tons.
 

Fibre2fashion News Desk - India

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