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The Southern India Mills’ Association

Committed to Foster the Growth of the Textile Industry

Uzbekistan introduces modern forms in cotton and textile production

The government of Uzbekistan issued a resolution “On measures to introduce modern forms of organization of cotton and textile production.” Starting with the raw cotton crop of 2018, an experiment is being conducted. Domestic textile enterprises can order and pay in advance for the production of raw cotton directly from farms and other agricultural producers. The government approved a list of 13 enterprises – organizers of cotton-textile production – which are direct participants in this experiment, Norma.uz reported.
According to the decree, these enterprises promote efficient and rational use of land, water and other resources, increase in yields and timely harvesting of raw cotton, and also ensure its further in-depth processing and production of products with high added value. They are subject to the conditions and the procedure for the acquisition of agricultural machinery in leasing, the supply of mineral fertilizers, seeds, fuel and lubricants, chemical protection products and other material resources for farming. Cotton fiber, produced for own needs within the cotton-textile production, is certified on a voluntary basis. In general, cotton fiber is subject to mandatory certification. The volume of cotton fiber, exceeding the need for own production capacity, the organizer of cotton-textile production can sell to other domestic consumers under direct contracts or through exchange trades.
The document noted that the banks will lend the organizers of cotton and textile production in 2018 at the expense of the Fund for Targeted Financing of Government Procurement of Agricultural Products and Equipping with Agricultural Technology under the Cabinet of Ministers. The amount of loans is not less than 60 percent of the estimated need for financing the cultivation and supply of raw cotton (calculated taking into account the existing conditions for farms that sell raw cotton in the framework of state contracts) at a rate of no more than 3 percent per annum and on terms stipulated for financing farms that sell raw cotton within state order.
Currently, Uzbekistan is the world’s sixth-largest cotton producer among 90 cotton-growing countries. It produces about 1.1 million tons of cotton fiber annually, which accounts for about 6 percent of global cotton production. The country exports cotton mainly to China, Bangladesh, Korea and Russia. One of the policy priorities of Uzbekistan is further development of its textile industry. Uzbekistan takes consistent steps to increase the volume of cotton fiber processing.
In the period 2010-2014, the textile industry of Uzbekistan received and spent foreign investments worth $785 million while 147 new textile enterprises with participation of investors from Germany, Switzerland, Japan, South Korea, the USA, Turkey and other countries were commissioned. Export potential of these enterprises amounted to $670 millions.