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.
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.
How much does cotton cost in Uzbekistan?
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.
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.