VZCZCXYZ0005
RR RUEHWEB

DE RUEHEG #0262 0431033
ZNR UUUUU ZZH
R 121033Z FEB 09
FM AMEMBASSY CAIRO
TO RUEHC/SECSTATE WASHDC 1627
INFO RUEHRC/DEPT OF AGRICULTURE WASHINGTON DC
RUCPDOC/DEPT OF COMMERCE WASHDC

UNCLAS CAIRO 000262 
 
STATE PASS USTR 
 
USTR FOR FRANCESKI 
 
SIPDIS 
 
E.O. 12958:  N/A 
TAGS: ETRD EAGR ECON EG
SUBJECT:  QIZ EXPANSION TO SUPPORT EXPANDED US COTTON EXPORTS 
 
¶1.  Recent expansion of the QIZ into Beni Suef and Minya may help 
boost US cotton exports to Egypt.  At present, the US sells only 
Pima long staple cotton from California and Arizona in Egypt for use 
in high quality cotton products such as high threadcount sheets and 
shirts.  These imports supplement falling Egyptian domestic 
production of traditional Egyptian longstaple cotton.  U.S. exports 
to Egypt amount to about 2,000-5,000 metric tons (mt) of longstaple 
cotton annually, a very small but growing market segment. 
 
¶2.  In the meantime, importers have told us that with the expansion 
of the QIZ and the removal of present phytosanitary restrictions, 
they hope to begin importing cheaper shorter staple cotton from the 
U.S.  This cotton would be used in the lower quality, low tech 
textile production of T-shirts and denim.  In 1992 Egypt imported 
100,000 mt of U.S. cotton but due to concerns about boll weevil 
infestation in the major producing states (Texas and Tennessee) U.S. 
exports came to halt.  Marsha Powell, from the U.S. Cotton Council 
visited Egypt in September 2008 to discuss the potential for renewed 
exports given the eradication programs in place in the U.S..  FAS 
Cairo met with Ministry of Agriculture officials and agreed to 
present phytosanitary technical files from the major producing 
states showing their compliance with Egyptian requirements. 
 
¶3.  APHIS inspection certificates will be required for each shipment 
of cotton coming from the U.S.  FAS is in discussions with the GOE 
to agree on what the certification requirements for the imported 
cotton will be, what APHIS inspections will entail and what the 
certificates will say.  We hope to reach agreement on these issues 
by mid-2009. 
 
¶4.  Currently Egypt imports about 100,000 mt of cotton annually, 
mainly from Greece, Sudan and Syria.  The government, however, wants 
to diversify the supply of cotton for their textile industry and so 
is very interested in U.S. cotton. 
Scobey