This price is on average close to production costs plus some profitability margin of cotton producers in Uzbekistan. The raw cotton production costs in 2019 averaged $800/ha. With the average cotton yield of 2.4 tons/ha, the production cost per ton averaged $335.
How is cotton produced in Uzbekistan?
In the past, the state was used to establish a farm-gate price for raw cotton under the state procurement system. The peculiarity of the cotton production in Uzbekistan is that it is managed by cotton-textile clusters. In 2020, the cotton will be grown on the area of slightly above 1 million hectares by more than 100 cotton-textile clusters3.
Is Uzbekistan a net exporter of cotton?
Uzbekistan is a net exporter of cotton, so export parity price¡¯s concept is appropriate. The estimate of the Uzbekistan¡¯s export parity price for raw cotton is presented in the last chapter.
When is cotton harvested in Uzbekistan?
The basis is derived from the analysis of Tables 3 and 4. 77 Cotton in Uzbekistan is usually harvested in October-November. Thus, the indicative prices should be announced prior to the harvesting season. This could be done in late August using the New York ICE cotton futures for December.