The Uzbekistan MY 2010/11 cotton lint production and export forecast has been increased to 4.93 million bales and 3.45 million bales, respectively.
THIS REPORT CONTAINS ASSESSMENTS OF COMMODITY AND TRADE ISSUES MADE BY
USDA STAFF AND NOT NECESSARILY STATEMENTS OF OFFICIAL U.S. GOVERNMENT
Required Report - public distribution
Uzbekistan - Republic of
Cotton and Products Annual
Uzbekistan Cotton and Products Annual 2011
The Uzbekistan MY 2010/11 cotton lint production and export forecast has been increased to 4.93
million bales and 3.45 million bales, respectively. Official targets for MY2011/12 planted area and
seed cotton production remain unchanged at 1.34 million ha and 3.4 MMT.
Due to favorable weather conditions which resulted in a good crop, Uzbekistan's MY2010/11 final lint
production estimate was increased to 4.93 million bales. Lint exports for MY2010/11 are estimated at
3.45 million bales. MY2011/12 mass cotton sowing is expected to start as usual in the beginning of
April and continue through the end of the month, assuming favorable weather conditions. MY2011/12
state targets for planted area and seed cotton production remain unchanged at 1.34 million hectares and
3.4 MMT, respectively.
Despite the recent global economic crisis and drop in world cotton consumption over last two years,
local mills continue efforts to increase their capacities. Domestic consumption is estimated at the level
of 1.5 million bales in MY20010/11 and in MY2011/12 it is forecast to increase to 1.6 million bales.
The government of Uzbekistan still maintains tight control over all aspects of cotton production,
including plantation area, production targets, prices, inputs, procurement and marketing. Domestic
supplies are allocated according to the government?s quota or plan, mainly through the State Joint-Stock
Company ?Ozengilsanoat? which then distributes cotton to domestic millers according to sales
contracts. Local textile mills can also buy cotton through the Commodity Exchange.
Despite Government efforts to modernize in recent years, Uzbekistan's cotton ginning industry still
consists of predominantly old gins. The spinning and weaving industries continue to invest heavily in
new equipment as well as to renovate existing equipment due to improving profitability over the past
years. Both domestic and export demand, particularly for cotton yarn, has marginally increased in the
past three years. However the worldwide economic crisis hurt the domestic textile industry, and in late
2008 textile production dropped. Recently, however, it has been reviving. The textile mills are trying to
pursue quality improvements and production diversification to include more value-added products,
rather than continuing with low-value yarn based exports. Most mills now understand that they need to
be extremely competitive in order to remain in the shrinking global market.
Currently, there are more than 43 joint ventures established in the textile industry with partners from
Turkey, Germany, South Korea, Japan and Switzerland. As of 2010, foreign investments in the textile
industry exceeded USD 1.1 billion. The main products produced and exported by textile mills are cotton
yarn, gray fabrics and some textile garments.
As in the past few years, China, Bangladesh and Russia are still the major buyers.
In MY2010/11 favorable weather conditions allowed farmers to start and complete cotton sowing
almost on time and a smooth vegetation process resulted in an overall better crop than in MY2009/10.
There was no major replanting needed and the cotton harvest started as planned in most regions. Good
average temperatures during the summer vegetation period in major cotton growing regions also
resulted in better yields. Taking into account all these factors, the MY2010/11 lint production estimate
for Uzbekistan has been increased to 4.93 million bales.
MY2011/12 mass cotton sowing is projected to start as usual in the beginning of April and continue
through the end of the month, assuming weather is favorable. The MY2011/12 state targets for planted
area and seed cotton production remain unchanged at 1.34 million hectares and 3.4 MMT, respectively.
As in previous years, in MY2011/12 farmers are reportedly planning to continue using such cotton
varieties as ?Bukhoro-6?, ?C-6524?, ?Namangan-77?, ?An Boyovut-2?, ?Bukhoro-8?, ?Bukhoro-102?
and a few others. These varieties are characterized by their early-ripening, good yields, resistance to
various common diseases and enjoy of high demand in the world market.
The Government's overall cotton policy is still aimed at maintaining stable production and improving
quality and fiber characteristics, according to the speeches of Government officials during the 6th
International Uzbek Cotton Fair last October. During the fair, the Prime Minister officially declared a
Government plan to increase domestic cotton consumption up to 70 percent by 2015.
All state farms have been privatized and reorganized into private farms. In spite of these structural
reforms in the agricultural sector, the government still maintains tight control over all aspects of
production including planted area, production targets, prices, inputs, procurement and marketing of
nearly all of the cotton in Uzbekistan.
The local ginning industry has made some improvement in their ginning technology, as a result of
which the ginned lint has less trash content than in the past. About 80-85 percent of all produced lint is
of higher grades and sees strict and good middling. Volumes of lower grade lint have decreased. The
cotton ginning industry nevertheless is one of several sectors of the country?s economy where new
investments are needed.
The government has often stated that it would like more of Uzbekistan?s cotton production to be
processed domestically, but it has had only limited success. Less than 30 percent of all cotton is
consumed domestically. Effective ginning capacity is estimated to be well below the 6.0 MMT of
installed capacity due to equipment problems. Taking into account these and other production problems,
the government launched a modernization and reconstruction program for some cotton gins during
2007-2011. Under this program, the government now is working on modernization 41 cotton gins and
has closed some old cotton gins in large cities, in particular those gins with old equipment and with the
There were no changes to the mechanism of cotton exporting in Uzbekistan, which still remains under
centralized state control. All cotton lint is still sold either to the trading companies of the Ministry of
Foreign Economic Relations to Investments and Trade (MFERIT) for export or to the Republican
Commodity Exchange that organizes cotton lint sales for domestic consumers.
Prior to the world economic crisis, the spinning and weaving industries had been investing heavily in
new equipment and renovation of existing equipment, as domestic and export demand grew, especially
for cotton yarn. As global markets have contracted, the textile industry more than ever must
aggressively pursue quality improvements and production diversification to include more value-added
products, rather than rely on low-value yarn based exports, if it wants to remain competitive.
Currently, there are 240 textile manufacturers in the country. Among them 42 joint ventures were
established in the textile industry with partners from Turkey, Germany, South Korea, Japan and
Switzerland. As of 2009, foreign investment in the textile industry exceeded USD 1 billion. The local
spinning industry is optimistic about textile production and export growth. Uzbekistan?s MY2010/11
domestic lint consumption is estimated to at an increased 1.5 million bales and MY2011/12 is
preliminarily forecast at 1.6 million bales.
A few months ago the Bangladesh Commerce Minister led a team of government officials and local
industry leaders to Uzbekistan. The Bangladesh business delegation was represented by the Bangladesh
Textile Mills Association (BJMA) and the Bangladesh Cotton Association, which discussed the
possibility of direct investments from Bangladesh in Uzbekistan cotton production and textile
manufacturing. As a result of these negotiations, Uzbekistan reportedly agreed to provide a secured
supply of 200,000 tons of raw cotton to Bangladesh every year.
In addition, the Uzbek Minister of Foreign Economic Relations Investments and Trade (MFERIT)
encouraged the Bangladesh business delegation to make investments in the spinning industry of
Uzbekistan. In exchange, the GOU would allow Bangladesh investors to produce about 200,000 MT of
yarn, of which half could be brought back to Bangladesh and half could be exported to CIS countries.
The GOU guaranteed that Bangladesh investors would receive a favorable treatment including a 15 per
cent discount in raw cotton prices and a seven-year tax holiday.
Exports of cotton are projected to continue declining although slowly. Post forecasts MY2010/11 lint
exports at 3.45 million bales. MY2011/12 exports are preliminarily forecast at the level of 3.5 million
bales. After the last International Uzbek Cotton Fair, the officials of MFERIT announced that during
the fair contracts for exporting about 650,000 tons of lint were signed. In addition, reportedly contracts
worth more than USD 500 million were signed to export the products of domestic textile enterprises,
including more than USD100 million for the supply of finished textile products. The fair once again
showed that Uzbekistan remains a primary supplier of cotton to Asia, with Bangladesh, China, South
Korea and Russia still the major markets for Uzbek cotton.
After the Fair, seeking new channels for exporting cotton, the Uzbek Trading Company within MFERIT
signed a MOU with Tianjin Cotton Exchange Market (from China) to create a joint venture on spot
sales of Uzbek cotton through a free trade zone in Tianjin. Both parties are planning sales of up to
100,000 tons of lint from Uzbekistan to China annually.
In addition, the Uzbekistan government has reportedly agreed to provide one million cotton bales to
Pakistan by June 30, 2011 on the A index. Reports indicate that the Uzbek government has amended its
law for Pakistan so that the previous condition of 80 percent advance cash has been withdrawn.
A well-established local system of logistics, consisting of 23 specialized cotton terminals with a storage
capacity of 400,000 tons, as well as a good transportation infrastructure and shipment corridors facilitate
timely deliveries of Uzbek cotton to buyers.
There are no official sources of information on stock volumes, so the numbers indicated in this report
Production, Supply and Demand Data Statistics:
Table 1. Cotton Production, Supply and Demand
Cotton Uzbekistan 2009/2010 2010/2011 2011/2012
Market Year Begin: Aug 2009 Market Year Begin: Aug 2010 Market Year Begin: Aug 2011
USDA Official New Post USDA Official New Post USDA Official New Post
Area Planted 0 1,315 0 1,340 1,340
Area Harvested 1,300 1,300 1,300 1,330 1,340
Beginning Stocks 1,948 1,948 948 1,098 1,078
Production 3,900 4,100 4,650 4,930 4,840
Imports 0 0 0 0 0
MY Imports from U.S. 0 0 0 0 0
Total Supply 5,848 6,048 5,598 6,028 5,918
Exports 3,800 3,800 3,500 3,450 3,500
Use 1,100 1,150 1,250 1,500 1,600
Loss 0 0 0 0 0
Total Dom. Cons. 1,100 1,150 1,250 1,500 1,600
Ending Stocks 948 1,098 848 1,078 818
Total Distribution 5,848 6,048 5,598 6,028 5,918
1000 HA, 1000 480 lb. Bales
Table 2. MY2010/11 Seed cotton production by region
Regions State target (ton) Actual production (ton)
Karakalpakstan 180,000 188,003
Andijon 283,000 293,080
Bukhara 342,000 351,157
Djizakh 224,000 224,270
Kashkadarya 417,000 434,723
Navoi 100,000 104,466
Namangan 240,000 240,413
Samarkand 238,000 243,112
Surkhondarya 335,000 343,625
Syrdarya 238,000 233,538
Tashkent 255,000 255,271
Ferghana 290,000 290,185
Khorezm 258,000 261,342
Total Republic 3,400,000 3,463,185
Table 3. Uzbek textile production statistics
Commodity CY 2009 CY 2010
Cotton yarn (thousand tons) 145.5 185.8
Knitwear articles (million pcs) 33.9 50.5
Knitted fabric (tons) 11,000.2 21052.0
Hosiery (thousand pcs) 89.0 154.0
Cotton fabrics (million sq meters) 82.0 83.6