Egypt impose export fee on scrap fabrics to support domestic textile industry

Egypt has witnessed growth in the export of waste fabrics over the past three years, from 43 tons in 2013 to 294 tons in 2015, according to the Trade and Industry Minister Tareq Qabil. Trade and Industry Minister has imposed an export fee of LE3,500 per ton of clippings and scrap fabrics in response to the demands from textile manufacturers.

The decision was taken to save raw materials and protect the labor-intensive domestic textile industry and to avoid shortage of scrap in the local market, minister of trade and industry Tarek Qabil said while announcing the decision, adding that producers prefer to export waste fabrics because they sell the ton for LE9,780, as opposed to LE6,080 in the local market.

Qabil said that the decision was endorsed by the Holding Company for Cotton, the Textile Export Council and the Flax Company.

The Textile Export Council said that waste from home furnishings is recycled to produce thick yarn used by small and medium-sized furniture factories.

The Businessmen Association, meanwhile, has recommended that the fee be increased by 25 percent.

With the application of this new fee, the hope is that people will have more of an incentive to sell locally, as the margins for export would shrink considerably.

A similar previous decision to levy export fee of LE 2,500 per tonne is set to expire by the end of 2015.