Cotton and Products Update

An Expert's View about Cotton in Uzbekistan

Posted on: 19 Dec 2012

Uzbekistan Seeks Greater Utilization of Domestic Production

THIS REPORT CONTAINS ASSESSMENTS OF COMMODITY AND TRADE ISSUES MADE BY USDA STAFF AND NOT NECESSARILY STATEMENTS OF OFFICIAL U.S. GOVERNMENT POLICY Required Report - public distribution Date: 11/30/2012 GAIN Report Number: Uzbekistan - Republic of Cotton and Products Update Uzbekistan Seeks Greater Utilization of Domestic Production Approved By: Jess Paulson, Agricultural Attaché Prepared By: Nizam Yuldashbaev, Agricultural Specialist Report Highlights: 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. Post: Commodities: Tashkent Cotton Author Defined: 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. Table 1. Cotton Production, Supply and demand Cotton Uzbekistan 2010/2011 2011/2012 2012/2013 Market Year Begin: Aug 2010 Market Year Begin: Aug 2011 Market Year Begin: Aug 2012 USDA Official New Post USDA Official New Post USDA Official New Post Area Planted 0 1,340 0 1,330 0 1,340 Area Harvested 1,300 1,330 1,340 1,320 1,285 1,320 Beginning Stocks 948 948 1,148 1,148 1,498 1,198 Production 4,100 4,350 4,200 4,500 4,100 4,550 Imports 0 0 0 0 0 0 MY Imports from U.S. 0 0 0 0 0 0 Total Supply 5,048 5,298 5,348 5,648 5,598 5,748 Exports 2,650 2,900 2,500 3,100 2,600 3,000 Use 1,250 1,250 1,350 1,350 1,450 1,400 Loss 0 0 0 0 0 0 Total Dom. Cons. 1,250 1,250 1,350 1,350 1,450 1,400 Ending Stocks 1,148 1,148 1,498 1,198 1,548 1,348 Total Distribution 5,048 5,298 5,348 5,648 5,598 5,748 1000 HA, 1000 480 lb. Bales, PERCENT, KG/HA Table 2. MY12/13 official seed cotton plant area and production target by regions as of October 23, 2012 Regions Plant Area Produc. Target Actual (1,000 ha) (1,000 tons) Production (1,000 tons Karakalpakstan 94.7 190,000 215,428 Andijan 99.6 266,000 291,839 Buukhara 109.6 342,000 345,673 Djizakh 116.4 229,000 230,911 Kashkadarya 160.4 417,000 417,782 Navoi 100.9 100,000 110,140 Namangan 86.6 230,000 230,755 Samarkand 99.2 223,000 231,796 Surkhandarya 119.6 335,000 338,601 Syrdarya 110.7 243,000 247,795 Tashkent 100.2 237,000 241,206 Ferghana 109.0 280,000 282,164 Khorezm 93.8 258,000 259,924 Country Total: 1321.0 3,350,000 3,444,014 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. Table 3. The major planted cotton varieties in MY12/13 and their quality characteristics Variety Micronair UHML Strength UI RD B Unit inch Gf/tex % % % Bukhara 102 4,49 112,84 31,56 83,26 78,98 8,87 Bukhara 8 4,43 113,17 31,51 83,34 79,89 8,93 Bukhara 6 4,42 112,78 31,49 83,28 79,52 8,95 Namangan-77 4,61 111,14 31,08 83,48 77,96 8,68 Omad 4,43 113,43 31,32 83,41 77,19 8,65 An-Bayaut 2 4,63 111,19 30,94 83,04 77,84 8,68 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: Table 4. MY12/13 Procurement prices for seed cotton in Uzb Sums per 1 ton Industrial Types/codes of cotton lint Grades Long Staple grades Medium Staple grades and class of 1a 1b 1 2 3 4 5 6 seed cotton 43 42 41 40 39-38 37-36 35 34 33 Class 1 1428720 1306010 1244650 1095650 990460 888530 876520 865120 854200 I Class 2 1392160 1272580 1212800 1067600 965110 865780 854080 842980 832100 Class 3 1113990 1018310 970470 854280 772270 692790 683430 674540 660200 Class 1 1305960 1193790 1137710 1001510 905360 812180 801204 790790 783000 II Class 2 1197570 1094710 1043280 918380 830220 744770 734700 725150 716000 Class 3 1100930 1006370 959090 844270 763220 684670 675420 666640 658000 Class 1 1144020 1045760 996630 877320 793100 711470 701860 692730 684000 III Class 2 1017350 929970 886280 780170 705280 632690 624140 616020 608000 Class 3 719590 657780 626880 551830 498850 447510 441460 435720 436000 Class 1 851490 778350 741790 652980 590300 529540 522390 515590 509000 IV Class 2 660820 604060 575680 506760 458110 410960 405410 400140 395000 Class 3 505410 462000 440290 387580 350380 314310 310070 306040 302000 V Class 3 353920 323520 308320 271410 245350 220100 217130 214300 212000 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.
Posted: 19 December 2012

See more from Cotton in Uzbekistan

Expert Views    
Cotton and Products Annual 2011   By Foreign Agricultural Service
Cotton and Products Update   By Foreign Agricultural Service
Cotton and Products Update   By Foreign Agricultural Service
Cotton and Products Update   By Foreign Agricultural Service
Uzbekistan Cotton Annual 2012   By Foreign Agricultural Service