Current Situation of Egyptian Cotton: Econometrics Study Using ARDL Model

Abstract

The Egyptian cotton crop have experienced challenges in recent years from a drop in the quantity produced and exported, to a decrease in cultivated areas, this have affected the production quantity and value of exports. This study aims to bridge the research gap by exploring the nexus between cultivated area of cotton in Egypt, Relative profitability (cotton-clover/rice-clover), export quantity of cotton, the export prices of Egyptian cotton and the export prices of American cotton (Pima). In order to clarify the relationship between the variables studied and the cultivated area of cotton, the research use time series data from 1980 to 2016, using the Autoregressive Distributed Lag (ARDL) bound test to the find the co-integration between the variables after checking the stationarity in chosen variables with different unit root tests e.g. Augmented Dickey-Fuller (ADF) and the Phillips-Perron (PP). The results show, significant factors that influence the cultivated area of cotton include Relative profitability (cotton-clover/rice-clover), export quantity of cotton in long run term. Which underscores the need for government support in agriculture, in particular, cotton crop support. The increasing trend of cotton cost with declining revenue and decreasing in exports quantity is the main cause of decreased cultivated area of Egyptian cotton. Research recommends that support should be given to cotton farmers, in the form of agricultural equipment or training in good agricultural practices or set a price for cotton guaranteeing a decent profit margin for the farmers. The government (policy makers) should improve the productivity of cotton with the purpose of reducing the total costs and increasing the degree of competitiveness of the Egyptian cotton. Some effective policy measures may include but not limited to, farmer training programs and providing better extension services that will led to the capacity development of farmers.

Intelligent Image Classification for Grading Egyptian Cotton Lint

“…This work aims to address inefficiencies during the grading of Egyptian cotton lint by developing an affordable intelligent sensor to grade cotton lint. This work complements the goal of UNIDO to support SMEs cotton growers and processers, as there is an opportunity to use this system to help drive value back towards SME Egyptian cotton processors, who have been identified as needing support in light of falling cotton prices [3]. Providing processers with the tools to grade their harvested cotton lint will strengthen their bargaining position to demand a fair price for their cotton lint, as higher graded cotton lint requires less downstream processing.…”

“…Cotton is an important textile crop, accounting for 90% of all-natural fibres used in the textile industry [1]. The textile industry plays a significant role in the Egyptian economy and wider society, contributing around 14% towards GDP [2] and employing 25.8% of the industrial workforce [3]. Among global cotton producers, Egyptian cotton has a reputation for producing the highest quality cotton [4].…”

“…The high quality of Egyptian cotton is primarily attributed to (A) the cotton lint being handpicked to avoid mixing yield of mature and immature plants and (B) the cotton fibre's exceptional length, fineness and brightness [5]. Since the mid-1980s, the production of Egyptian cotton has been declining [3], and exports have decreased from 164000 tonnes in 1980 to 71000 tonnes by 2019 [6]. Current challenges faced by the industry include high production costs and low productivity [3].…”

“…Since the mid-1980s, the production of Egyptian cotton has been declining [3], and exports have decreased from 164000 tonnes in 1980 to 71000 tonnes by 2019 [6]. Current challenges faced by the industry include high production costs and low productivity [3]. Domestic and international measures have been introduced to strengthen the Egyptian cotton industry.…”

“…While these studies demonstrate the potential of removing human error from the fibre grading and selection process, they rely on cotton lint measurements from traditional fibre analytical equipment, such as the HVI, as input data. These analytical equipment have a high capital cost making them unattractive to SME Egyptian cotton lint producers that already suffer from high production costs [3]. However, combining affordable, easy to use, low-cost sensors with data-driven modelling will enable the development of intelligent sensors [14] that can replace high-cost analytical equipment for grading Egyptian fibre cotton.…”