Contractual farming of cotton applied for first time

Selim Hassan
3 Min Read
cotton

The Ministry of Agriculture began implementing a contractual system for farming the cotton crop for the first time, and it contracted with private sector companies to sell the crop’s yield from 34,000 feddans.

The ministry seeks to market as much of the crop as possible before the harvest in order to encourage farmers to expand local production to cover the needs of the government and private spinners.

Waleed Al-Saadany, chairperson of the Egyptian Cotton Trading Organisation Committee, said that three private sector companies contracted for the harvest of 34,000 feddans in Upper Egypt for cotton type Giza 95.

He estimated the production of the contracted area at about 240,000 kantars, with seven kantars per feddan, to sell at market price at the time of harvest, which should be no less than the guaranteed prices announced by the government for the current season.

The cabinet raised cotton’s guaranteed prices this season by EGP 300 per kantar to reach EGP 2,500 for Upper Egyptian cotton and EGP 2,700 for Lower Egyptian harvests, based on the type.

Abbas Al-Shenawy, head of the services and supervision sector at the Ministry of Agriculture, said that the ministry is seeking to contract on as much cotton as possible during the current season to facilitate the pre-harvest marketing process.

He pointed out that the increase in contracts this season achieves a large percentage of the government’s targets for the crop in the coming season, which aims to increase its harvest area to at least 500,000 feddans, compared to 350,000 feddans this season.

During the past seven years, the area of ​​cotton cultivation shrank due to low prices and high cost of agriculture, pest control, and fertilisers. Two seasons ago, the area dropped to 245,000 feddans, while the price was estimated at EGP 1,000 per kantar on average, which led to a historic decline of cultivation areas to 131,000 feddans.

The government is seeking to provide the needs of local governments and private spinners, and to reduce the volume of imports, which is at least 2m kantars annually.

Cotton traders have predicted that the maximum area of cotton cultivation can reach 300,000 feddans during the current season, and they have considered the annual increase to be better than a one-off to avoid a price crisis due to oversupply.

Nabil Santarisy, president of the Alexandria Cotton Exporters’ Association (ALCOTEXA), said that agriculture for export is a good idea that expansion requires using seeds of higher quality to reduce the cost of production.

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