Prepared by Stephane Cossé.
On average, the sector has been a net importer.
However, customs duties will remain high at 47.5 percent for most goods. Furthermore, the tariff on machinery and equipment for the industry is low, thereby raising the effective level of protection.
Upstream activities are defined as the production of raw and ginned cotton.
There is no single benchmark for a world purchase price to farmers. Syria’s price of US$/kg 0.3 (LS/kg 15) set in 2004–05 is roughly close to average production costs in sub-Saharan Africa. The purchase price paid to farmers in Sahelian countries averaged US$/kg 0.35-0.4 during the same period.
At the start of the season, the Agricultural Bank also provides loans in kind and in cash (40-60 percent, respectively) at concesional rates to farmers and cooperatives for an amount equivalent to 0.1 percent of GDP. One-third of the loans are estimated to be nonperforming.
No study is available on whether production would be resilient to a fall in the purchase price (in particular, no data are available to estimate the marginal costs of producing cotton in Syria).
Downstream activities are defined here as the production of yarn, fabric, and garments.
Latest available data. Source:UNCTAD.
However, 65 percent of the yarn produced was exported to the EU in 2004.
Given the relatively small level of textile exports to the EU out of Syria’s total exports (about 3 percent), the country could only be marginally affected by the removal of the quotas under the Multi-Fiber Agreement.
The agency states that the authorities have requested since 2004 that yarn be sold at the world price level (the agency is also pressured in this respect by lower synthetic-based material prices, an apparent increase in informal imports, and the emergence of private micro-producers).
The CMO has indicated that they could withstand the implications of lifting the ban on cotton imports and the removal of the domestic supply obligations as they are confident the sector is competitive.