CAIRO: The Cabinet agreed in its meeting Monday to hike the public spinners’ subsidy to 500 million EGP, adding 300 million to the current 200 million EGP, as to revitalize the cotton and textile sectors, Egyptian Time gate reported.
The public and private spinners will get 350 EGP subsidy from each purchased kantar of Egyptian cottons in the current marketing season of 2013-2014, Minister of Industry and Trade Mounir Fakhry Abdel Nour said.
“The government will also grant exporters a 200 EGP subsidy for each exported kantar,” he said and that Egypt’s productions of cotton will be increased up to 1 million kantars.
About 350 million EGP of the financial allocation will be directed to subsidize the public and private sectors along with the exporters, he added. The remaining 150 million EGP will be directed to supporting farmers “by presenting subsidized seeds and fertilizers,” re-running the bankrupted spinners, and revitalizing the sector as a whole.
The government seeks to encourage public spinners and exporters to purchase Egyptian cotton instead of exported cotton, who previously refrained from purchasing Egyptian cotton because of its high prices.
The public spinners’ aversion of purchasing Egyptian cotton caused a sharp decline by 79.9 percent, totaling at 81.6 thousand kantars, during the second quarter of the current agricultural year, compared to the 150,500 kantars the previous year, according to the Central Agency for Public Mobilization and Statistics (CAPMAS) last report in May.
Besides the decline in consumption, cotton export also declined by 46.5 percent, totaling at 126,600 metric kantars compared to the 236,800 kantars during the same period last year.
The price of Egyptian cotton was 1,300 EGP per kantar while imported cotton was 750 EGP per kantar.
Ahmed Mustafa is head of the Cotton and Textile Industries Holding Company (CTIHC), which co-owns and oversees 32 garment industry subsidiaries. He praised the Cabinet’s decision, pointing out that his company and its subsidiaries will tend for purchasing the Egyptian cotton and be very close in prices as the imported cottons but with higher qualities, Al-Mal Business Daily reported Monday.
“This new decision will revitalize the sector as a whole, comprising of farmers, cotton workers, merchants, and exporters, increase Egypt’s revenues of cotton, and re-run the halted factories,” Mustafa added.
For the workers, the General Syndicate for Spinning and Weaving received 181 million EGP from the Ministry of Finance on July 22 as financial dues for the 70,000 workers in public sector companies, Al-Masry Al-Youm reported head of the syndicate Abdel Fatah Ibrahim as saying.
“Getting such sums is within the government’s urgent strategy to encourage workers, solve sector problems, and end the workers’ strikes,” Ibrahim said. “The workers will be paid their deserved sums before the Eid holiday.”