انا بفضل القطن والحرير، واختي بتحب الصوف.

Arabic writing usually leaves out most short vowels, so learners have to pick them up from context and exposure.

In this sentence, a common Egyptian reading is:

• بفضل → bafaddal
• بتحب → bitḥibb

So the whole sentence is roughly pronounced ana bafaddal el-’oṭn wel-ḥarīr, w-okhti bitḥibb eṣ-ṣūf.

In Egyptian Arabic, بـ on a verb usually marks the present/habitual form.

So:

• بفضل = I prefer / I generally prefer
• بتحب = she likes / she generally likes

This is one of the big differences from Modern Standard Arabic, where you would more often see أفضّل and تحبّ without this بـ in a simple present statement.

انا is optional here.

Because بفضل already tells you the subject is I, you can absolutely say:

• بفضل القطن والحرير

Adding انا makes the subject clearer or slightly more emphatic:

• انا بفضل القطن والحرير

Both are natural.

Because أختي means my sister, and sister is feminine.

In Egyptian Arabic, the present tense for she often starts with بتـ:

• هو بيحب = he likes
• هي بتحب = she likes

So with أختي, you use بتحب, not بيحب.

The base word is أخت = sister.

To say my sister, Arabic adds the suffix ـي meaning my:

• أخت = sister
• أختي = my sister

This is a very common pattern in Arabic:

• كتابي = my book
• بيتي = my house
• أمي = my mother

Arabic often uses the definite article ال with materials and generic nouns where English uses no article.

So:

• القطن = cotton
• الحرير = silk
• الصوف = wool

Even though the form literally looks like the cotton / the silk / the wool, the meaning in context is just the material in general. This is very normal in Arabic.

و means and, and it attaches مباشرة to the next word as a prefix.

So:

• والحرير = and silk
• واختي = and my sister

In speech, it is usually just a short w- sound. Before ال, it often comes out as something like wel- or wil-, so والحرير is commonly heard as wel-ḥarīr.

This is because of sun letters and moon letters.

• ص is a sun letter, so the ل of ال is not pronounced separately.
  الصوف is pronounced roughly eṣ-ṣūf.
• ق and ح are moon letters, so the ل is pronounced.
  القطن = el-’oṭn
  الحرير = el-ḥarīr

This is a very important pronunciation rule in Arabic.

In Egyptian Arabic, ق is very often pronounced as ء (a glottal stop) rather than q.

So القطن is commonly pronounced:

• el-’oṭn

In Modern Standard Arabic, it would be closer to al-quṭn. Both spellings use the same Arabic letter ق, but the pronunciation changes by dialect.

They are related, but not identical.

• بفضل means I prefer
• بتحب means she likes / loves

So the speaker is saying cotton and silk are the materials they prefer, while the sister simply likes wool.

If you changed the first part to انا بحب القطن والحرير, it would mean I like cotton and silk, which is slightly weaker and less specific than I prefer.

This sentence is clearly Egyptian Arabic in style.

The biggest clue is the present-tense بـ prefix:

• بفضل
• بتحب

In Modern Standard Arabic, the same idea would usually be:

• أنا أفضّل القطن والحرير، وأختي تحبّ الصوف.

So the sentence you were given is best understood as everyday spoken Egyptian.