When the Egyptian government cut subsidies for the iconic, high quality cotton crops, the global fashion industry felt the ripples and is now in panic. Designers are now left with two options: cut out the middle man or look elsewhere...
What do Hugo Boss, Hermès, Christian Dior, and just about every high end hotel have in common? They all rely on Egyptian cotton to distinguish their luxury brands from others and are currently in a panic. Egyptian cotton seems to be heading towards extinction as Egyptian farmers turn to a lower quality grains to stay profitable.
Egyptian cotton is heralded as the best and most unique cotton in the world. For centuries this crop has been Egypt’s most important and sought after export, and is synonymous with Egypt as much as its great pyramids of Giza. "The quality characteristics are unique," Andrei Guitchounts, director of trade analysis at the International Cotton Advisory Committee in Washington, tells the Economic Times. Its superiority over other forms of cotton is largely due to the rich soil and moist atmosphere provided by the Nile River allowing for the growth of long cotton fibers called staples. The use of longer staples results in uninterrupted fibers generating a stronger and yet finer yarn, which allows for an increase of thread count in each square inch. The end result, as Martha Stewart describes on her website, is that “Egyptian cotton is considered the finest of all varieties because it produces an extremely soft and supple weave." Despite its superiority and consistently growing demand, Egyptian cotton is facing crisis as government ended subsidies in January, resulting in many cotton producers turning to a cheaper quality grain in hopes of turning a profit.
At the time, Agriculture Minister Adel El-Beltagy explained the decision claiming that the Egyptian cotton is very expensive to produce and that there isn’t much demand for it both locally or international. The demand for premium cotton accounts for less than 3% of the global market, so Egypt calculated that subsidies for the crop didn't make sense in a country looking to cut costs. However, that assessment counters a report by the National Statistics Agency who calculated that the total Egyptian cotton export rose by 94.3%, from December 2014 to February 2015, and that local consumption rose by 115.5% in the second agricultural quarter compared to the same period last year. Before the subsidies were halted, the government was giving cotton growers LE1,400 per feddan, an amount that totaled $550 million in the last season it was applied. At the time farmers complained that the amount was still insufficient to reach profitability, and now with no subsidies granted, farmers are turning away from the expensive crop. The increase demand may be a sign that Egypt is recovering from the economic turmoil brought on by the January 25th uprising, or could be indicative of the fact that fashion brands are trying to get as much cotton as they can before it becomes impossible to find.
Talking to Ahram Online, professor of agricultural economics at Cairo University, Gamal Siyam, warns that “Removing cotton subsidies means the end of Egyptian cotton,” adding that "the problem with cotton production is that feddan productivity is low relative to current international prices, so planting it is not economically viable." The effects of the decision to end subsidising Egyptian cotton is only now starting to be felt, as on Monday workers from the Egypt-Iran Company for Spinning and Weaving, staged a protest asking Governor Major General Al Araby Al-Sarawy to intervene and rescue the factory, after 2,500 workers were forced to take leave from work as the company ran out of cotton to keep the factory operational.
With the news seemingly getting grimmer for Egyptian cotton, many designers and fabric makers have started coming to the defense of this unique crop. "We are very scared to lose this good cotton," Aldo Pienzi, a consultant at Albini Group, an Italy-based maker of fabric for designers including Hermès and Christian Dior. Production is estimated to tumble 35% in the next season to the lowest ever recorded estimates The US Department of Agriculture who told the Economic Times that "If they lose this production, I don't think any other producer can replicate it." Attempting to replicate Egypt’s historic export are researchers in Brazil who have developed a long-fiber cotton, which they hope will compete in quality to its Egyptian counterpart. According to Embrapa, a Brazilian Agricultural Research Corporation, “Two cultivated varieties were used: one that displays a high productivity and another due to its long fibers. From the cross breeding of the plants, they selected the plants that displayed the greatest fiber length. Their modified cotton is still being researched and will optimistically take another three years, before being cultivated on a large scale. “We have to improve and evaluate the productivity and length of the fiber. After that, we need to go through the Biological Control Unit. At this stage, the variety needs to be planted and analyzed for two years in three different places. We should do the biological control starting next year in Ceará, Rio Grande do Norte and Goiás.”
Waiting for Brazil to develop a superior cotton is not an option for clothing brands constantly creating luxurious new looks for each fashionable season. Looking to work around the the obstacles, a new clothing brand in Toronto, Canada is proving that there is a cheaper way to acquire Egyptian cotton. Co-founded by Rami Helali, KOTN, a clothing startup, has managed to get Egyptian cotton cheaper by simply cutting out the middle man. “We looked at the market and we saw that it wasn’t just the retailer adding an extra mark-up, it was the wholesaler between the raw cotton, the fabric, all those steps were being marked up by one or two or three people,” Helali tells BNN.ca.
Helali is the grandson of an Egyptian farmer who worked in one of the biggest cotton growing municipalities. In order to cut out the middle man he travelled to Egypt and struck a deal with cotton farmers directly, providing them with the cash flow they need to produce Egyptian Cotton for KOTN. “We eliminate all the mark-ups and what that enables us to do is sell the product at a good price to the end consumer, and pay fair prices to the person who is actually going through this which is the farmers,’ explains Helali.
Although KOTN is just a start-up, they are leading the way in saving this historically and fashionably important crop from extinction. Hopefully, the model they have set will encourage others to follow as there would be no greater disappointment for Egyptians than having one of their most notable exports vanish or, worse, culturally stripped of its identity by a Brazilian crop.
Photo by Reuters)