A new scheme selling cotton to textile enterprises will be launched in Uzbekistan from next year. The presidential decree noted, “Starting with the harvest of raw cotton in 2018, as an experiment, the system of ordering and advancing the production of raw cotton directly from farms and other agricultural producers by domestic textile enterprises will be introduced.”
Through the years, enterprises purchased raw materials from the monopoly supplier Uzpahtasano at export. As per the new order, textile enterprises will finance the basic costs of farming to grow raw cotton by advancing at least 60 per cent of the contract's value. “All delivered raw cotton should be used only for further deep proces sing and production of finished competitive products,” the document noted. The price for raw cotton purchased by enterprises will be established on a contractual basis, based on an analysis of actual costs and profitability of farms. Despite this, it should not be lower than the cost of cotton purchased for state needs. Therefore, the President instructed the government to establish procurement prices for the 'white gold’ harvest of 2018 until January 15, 2018.
Textile enterprises sell cotton seeds to fat-and-oil enterprises and additional products to other consumers through exchange trade. This year Uzbekistan collected over 2.9 million tons of raw cotton. The experience of foreign countries has shown one of the most effective forms of development of the textile industry is the creation of clusters. This model implies the organisation of a single production cycle, which includes the cultivation of raw cotton, primary processing, further processing at cotton ginning enterprises ensures production of final textile products with high added value.
