Many textile factories in Aleppo, a major cotton industrial city of Syria are closing down. This has become a major concern for the cotton textile industry in North Syria.


Syria is a small country in Western Asia. Cotton is considered as a strategic crop in Syria, with more than 20% of the total population involved in its production, processing, and its byproducts. It has been, and is an important product, still continuing to hold an important position in the nations economy. Syria produces 7% of the total global cotton production. It is a major source of foreign revenue generation.


The industry enjoys benefits of cheap work force, stable supply of raw materials,technical accumulation, and good transportation network. It also suffers some drawbacks such as inadequate infrastructure, restrictive pricing system, weak credit practice, tax burden, limited finance sources, and lacking in general information. Currently, the industry is facing problems due to under utilization of cotton plantation areas.



Problems facing the industry:


Cotton production is Syria is mainly controlled by the Cotton Bureau of the Syrian Ministry of Agriculture. When water supply was adequate, and procurement price of seed cotton was reasonable, famers and producers had a good profit margin.But, during the past few years, farmers were facing water constraint,increasing production costs, and less procurement prices. All this resulted in;the farmers not utilizing the complete plantation areas.



 

Syria had been exporting cotton lint, and was ranking third in exports. Due to a decline in cotton production, and increase in the spinning capacity, exports of lint have been declining during the past few years. Fuel oil is used on a large scale in dyeing yarns for the textile sector. Soaring prices of fuel oil is also feared to impact the industry deeply. Due to increased yarn prices, and competition from import of cheap substitutes, many small manufacturers were forced out of business. There was news about the Syrian cotton being smuggled into the neighboring country of Turkey and sold at a price exceeding the local procurement prices by 30%. At present, Syria does not import cotton lint, or produce extra long staple cotton. But if the cotton plantation areas diminish, Syria might opt for importing cotton lint to run its spinning, and textile mills.


Syrian textile industry is currently in a difficult phase, also due to tough competition from the Chinese imports flooding the country. The Syrian customers purchasing power is very low, and the cost of production is high. This motivates the flow of cheap Chinese goods into the market.


Government Initiatives:


Syrian Government has come up with policy initiatives to enhance the cotton textile sector of the country. On 2011 April, the Government has declared a policy to increase the advance payment for farmers. As per the latest customs tariffs, duties on cotton are at one, ten, and fifteen percent based on the quality of cotton yarn. Customs duty on cotton textiles are at a flat rate of 15%. For synthetic fibres, customs duties are set at 1-10% and 10-15% for fabrics manufactured from synthetic fibres.


With policy initiatives for price developments required to support the production requirements, and pricing policies set by the Government for cotton crops, cotton lint exports may stop in the future.


References:


1.      Tecoya Trend, May 30, 2011

2.      Data Source: gain.fas.usda.gov

3.      made-in-syria.com