The Frayed Reputation of Egyptian Cotton

Bloomberg View , August 30, 2016

The scandal that has devastated the business and reputation of Welspun India Ltd., India’s largest maker of home goods like sheets and towels, may also end up wrecking the prestige of Egyptian cotton.

On Aug. 19, Target Corp. said that 750,000 Welspun sheets that were supposedly premium-priced Egyptian cotton were made of some other material. Target dropped Welspun as a supplier, immediately depriving the company of about $90 million in annual sales, or around 10 percent of its total revenue. Other Welspun customers, including Wal-Mart Stores Inc., Bed Bath & Beyond Inc. and J.C. Penney Co. are now investigating.

Welspun admits it’s at fault. “There has been a failure on our part, without an ambiguity,” Managing Director Rajesh Mandawewala said in a conference call. “The error is on our side so we have to take responsibility for it.” But he declared that the problem was “fiber provenance,” not cotton quality.

He's right. Legally, “Egyptian cotton” means exactly what it says. Not better, not softer, not stronger. Just grown in Egypt.

People assume that Egyptian cotton is better because Egypt was an exotic place where cotton with long fibers was raised, beginning not in ancient times but in the early 19th century. Such cotton is known as long staple or extra-long staple, depending on the fiber length. It accounts for only about 2.5 percent of global cotton consumption. Longer fibers make for stronger, smoother thread, and “Egyptian cotton” sounds special, like Moroccan leather or French perfume. But it’s the long fibers, not some unique attribute of Egyptian soil or climate, that makes the cotton better.

Not all Egyptian cotton has long fibers and not all long-staple cotton comes from Egypt. In fact, farmers there are decreasing the acreage devoted to producing it, because the demand for shorter staples is so much higher. In the past year, Egyptian cotton production has plunged more than 50 percent in response to changing government policies, with almost all of the lost acreage formerly devoted to long-staple crops.

The U.S. has long surpassed Egypt as the world’s largest producer of long-staple cotton, known here as Pima, some of which is exported to, yes, Egypt. According to a March report from the Foreign Agricultural Service of the U.S. Department of Agriculture:

Egyptian extra-long staple cotton is not suitable to manufacture most of the fabrics produced in Egypt, as most of the yarns produced require medium and short staple cotton. Even those who manufacture yarns that come from extra-long staple cotton see U.S. pima cotton as [a] better alternative due to the latter’s higher quality. Although the prices of U.S. Pima cotton are higher than Egyptian extra-long staple cotton, the deterioration of the Egyptian extra-long staple cotton forced local spinners to rely on Pima cotton to produce high quality yarn.

Since 1954, U.S. cotton producers have offered their own quality guarantee, using the Supima trademark to indicate not only provenance but extra-long staple cotton. The label lacks Arabian Nights glamour, but it’s a much less ambiguous term than “Egyptian cotton.”

Target paid more for Egyptian cotton, so it’s rightly angry. But it’s not clear that customers should care. In fact, they’d be better off ignoring the Egyptian cotton label and just feeling the sheets for themselves. If they are equally soft and durable, Xinjiang or Queensland — or the San Joaquin Valley — is as good as the Nile Delta.