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USDA GAIN: Oilseeds, Cotton, Sugar, Grain and Feed


07 December 2012

USDA GAIN: Uzbekistan Cotton and Products Update - December 2012USDA GAIN: Uzbekistan Cotton and Products Update - December 2012

Post forecasts MY2012/2013 Uzbek lint production at 4.55 million bales, at the same level as reported previously. The government of Uzbekistan (GOU) policy is to increase domestic cotton consumption up to 70 percent within the next few years. The textile industry actively continues to seek investments in renewing old equipment and establishing new mills.
USDA GAIN Report - Oilseeds, Cotton, Sugar, Grain and Feed

Cotton

Production

Uzbekistan’s MY12/13 cotton harvest concluded about 2 weeks ago. As of October 23, according to GOU official reports, farmers harvested 3.44 MMT of seed cotton, which exceeds the official production target by 2.8 percent. However, the final official production numbers for seed cotton are not yet available, and some observers and independent experts believe that official production figures, as is customary, are overestimated. This year’s crop was characterized by following factors:

  • Good favorable weather conditions before and during sowing. There was reportedly no significant replanting;
  • Better level of precipitation (even higher than normal at some point) during winter, which guaranteed adequate supply of irrigation water in major cotton growing regions;
  • No big cases of pest infestation or any other serious plant diseases which could considerably damage the crop;
  • Growers continue and increase use of early ripening, improved and new varieties of cotton.
  • However, in some regions, reportedly there were cases of some input problems (shortages of good quality seed, fertilizers and fuel for agricultural machinery, as well as poor level of agro-technical work done during sowing and vegetation).
  • Finally, mild and warm weather conditions without any significant rain from the beginning of September until mid-October created very favorable conditions to harvest most of the available crop (almost 99 % handpicked).

Taking into account the aforementioned factors, Post forecasts MY12/13 lint production at the same level as in the previous forecast, at 4.55 million bales.

Cotton Production, Supply and Demand


MY12/13 Official Seed Cotton Plant Area and Production Target by Regions as of October 23, 2012

Production Policy

The Government’s overall cotton policy is still aimed at maintaining stable production and improving quality and fiber characteristics. This was again confirmed in speeches of Government officials during the recently held 8th International Uzbek Cotton and Textile Fair.

Over the last two decades, the Uzbek Research Institute of Cotton Breeding developed 162 new varieties of cotton, 45 of which were included in the state register of Uzbekistan and recommended for planting in various regions of the Republic.

At the same time, over the last ten years the Government has put much effort in to the modernization of existing cotton gins. In accordance with the Government’s special decree in 2007-2012, in total 41 cotton gins were fully modernized and reconstructed.

The Major Planted Cotton Varieties in MY12/13 and Their Quality Characteristics

Domestic Prices

As usual, prior to cotton harvest at the end of August, the Uzbek Ministry of Finance set up official procurement prices for seed cotton. See these prices in the table below:

MY12/13 Procurement Prices for Seed Cotton in Uzb Sums per 1 ton

Current official exchange rate: Uzbek Sum 1960 = USD1.00

Stocks

There are no official data on stock numbers. Therefore, the indicated stock numbers are Post’s rough estimates.

Consumption

At the recent 8th International Uzbek Cotton Fair, government officials announced that domestic cotton consumption would further increase up to 70 percent within the next three years. Similar GOU announcements were also made 2-3 years ago in order to reach up to 50 percent consumption of domestic cotton production, but as of today it has yet to happen. Post continues to believe that this increase in consumption is not going to occur quickly, and this process will depend on successful development of the local textile industry. Post forecasts MY12/13 domestic consumption at 1.4 million bales.

The spinning and weaving industries continue to invest heavily in new equipment as well as to renovate existing equipment due to improved profitability over the past few years. Domestic demand is getting stronger with a marginal increase over the last three years. Export demand, especially for cotton yarn and textile garments, has also contributed to profitability.

The share of textile industry in the GDP of Uzbekistan has a tendency of constant growth. Currently there are over 280 enterprises of light industry with a total processing capacity of 400,000 tons of cotton lint. Over the past two and a half years 43 industrial enterprises worth US$387 million were commissioned by Uzbek light industry companies. For example, in 2012 alone 17 new textile enterprises were established. According to official sources, as of today the total amount of foreign investment in Uzbekistan’s textile industry come to about US$2.0 billion, including US$100 million in 2012 which allowed them to increase production of high quality textile products such as yarn, fabrics, apparel and others. According to GOU statements, Uzbekistan plans to increase annually the volume of production of textile products by 20 percent and exports by 10 percent.

December 2012

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