North African Country of Egypt Benefits From The Reduction

The North African country of Egypt would benefit from the reduction in cotton import tariff announced by Brazil’s Foreign Trade Board (Camex) last week.
 
As per the announcement, duty on import of cotton, classified in product codes 5201.00.20 and 5201.00.90 of the Mercusor Common Nomenclature, would be temporarily reduced from the existing 10 percent to zero percent.
 
The tariff cut would be valid for a quota on 80,000 tons for import of cotton during the period between May 1 and July 31, 2013, the statement said.
 
Brazil imported 1,120 tons of cotton of both kinds, for which zero-duty would be applicable, in the first two months of the current year. Of this, 319 tons, or about 28.4 percent was imported from Egypt, according to Brazil Arab News Agency (ANBA).
 
In terms of value, cotton imported from Egypt was worth US$ 961,000 of the total imports of US$ 2.2 million made by Brazil during the two-month period.
 
Market analysts predict that the tax breaks would halt increase in cotton prices in Brazilian market, and would benefit exporters like Egypt, as well as apparel manufacturers.
 
Egyptian cotton is among the best in the world and Brazilian textile companies use Egyptian cotton to get higher prices for their products, said Michel Aburachid, president of garment association of Minas Gerais, one of the five Brazilian states that buy cotton, of the two product categories.
 
Egyptian cotton is of long-fibre variety, which is dense, but results in light fabric with a soft touch. The use of this kind of cotton is increasing in Brazil, ANBA quoted Marcelo Prado, director of the Institute of Marketing and Industrial Studies (IEMI) as saying.
 
In 2012, Brazil imported 3,200 tons of cotton of the two kinds that have received tax cut. The imports were valued at US$ 9.3 million. Of this, 622 tons of cotton, valued at US$ 1.8 million, came from Egypt.
 
Besides Egypt, the main suppliers of cotton to Brazil last year were Israel, with US$ 2.6 million, followed by the US with US$ 1.9 million and then Argentina with US$ 1.5 million. Germany, Spain and Turkey were also among suppliers of cotton to Brazil.