About a month back Egypt imposed a ban on cotton imports. This was aimed at bolstering local cotton production and marketing. But the ban has now been removed. One reason is that Egypt’s ready-made garment sector, worth an estimated $2 billion a year in exports, is heavily reliant on imported cotton. Bulk manufacturers feared losing their competitive edge as lower count cotton yarn from Egypt is more expensive.

Manufacturers had already been suffering from currency exchange controls imposed by the Central Bank of Egypt in February to limit black market dealings. Currency exchange controls restrict imports by local manufacturers if they cannot access foreign currency. And these controls, on top of the ban on cotton imports, were having a serious effect on manufacturers.

With subsidies to cotton farmers scrapped earlier in the year, imports are expected to rise by 30 per cent this year. Most of the cotton is imported from India, the US and West Africa. Exports of raw Egyptian cotton slumped from 120.3 million bales in 2012-13 to 83.8 million bales in 2013-14. Conversely imports surged from 51.3 million bales to 117.8 million bales in the same period.