Minister of Trade and Industry Tarek Qabil issued a decision imposing an export fee of EGP 3,500 per tonne on fabric scraps, abolishing previous decisions in this regard.
He attributed the decision to the exertion of efforts to support the textile industry and avoid the negative consequences of the shortage of scraps – that are recycled and reused – in the local market due to the increase of exports, which threatens the domestic textile industry.
These fees have been imposed on raw materials to ensure their availability in the local market and avoid any negative impacts on textile investments, especially as it is a labour-intensive industry.
The Ministry of Industry’s decision came in response to the demands from textile manufacturers, who called upon the ministry to charge an export fee to ensure the availability of scraps in the local market. A similar previous decision will expire by the end of 2015.
Qabil said the ministry received the approvals of the Cotton and Textile Industries Holding Company and the Egyptian Textile Export Council Holding Company to maintain the fee.
The Home Textile Export Council also recommended charging the fee so fabrics can be recycled to produce thick yarns that can be used in the textile industry, especially by small and medium-sized factories and small-scale producers. The Egyptian Businessmen’s Association suggested increasing the fee by 25%.
Qabil said exports of fabric scraps have been growing over the past three years from 43 tonnes in 2013, to 93 tonnes in 2014, and 294 tonnes in 2015.
Many prefer to export in light of the difference between the price in the local market and that for exporting, amounting to EGP 3,670. The local price records EGP 3,700 per tonne in addition to a shipping fee of EGP 130 per tonne, while the price per exported tonne EGP 6,330, including the EGP 2,500 fee, but the selling price amounts to EGP 9,780 in foreign market.