Shavkat Mirziyoyev signed a decree on January 17 to implement market mechanisms in the cotton farming sector and the sale of raw cotton. The document has been published in the Lex.uz database.
Starting from the 2025 harvest, the Republican Commodity Exchange (UzRTSB) will set and announce the starting price for raw cotton (first grade, second class) for the upcoming harvest. This price will be calculated based on the average cotton fiber quotation on the New York Exchange over the previous six months.
Contracts for the purchase and sale of cotton (futures, forward, spot) will be concluded through exchange trading, based on the free choice of the parties. Farmers will have the autonomy to choose their buyers and delivery dates.
The trading will be conducted in a special section of UzRTSB, separately for each region of Uzbekistan. To conclude contracts, both the farmer and the processor must be registered in a database integrated with the "Agroplatform" system.
Futures contracts can be established from November 1 to June 1 at a price not lower than the starting level set by the exchange. Such a contract will serve as the basis for the allocation of a subsidized loan to the farmer from the resources of the Agricultural Support Fund.
If the farm repays the subsidized loan by December 31 of the year for which it was taken, part of the interest payments on the loan will be refunded at a rate of 4%.
In the case of a forward contract, expenses are covered by the funds of the farm and/or the processor, or from commercial credit. These can be formalized at mutually agreed prices from November 1 to March 1.
Spot contracts will be concluded in real-time for the volumes of raw cotton stored in the warehouse. To formalize these contracts, the farm must provide a conclusion from the Uzbek Agro-Inspection regarding the compliance of its warehouse with the requirements, or a warehouse rental agreement.
In this case, farms that have grown raw cotton using their own funds or commercial credits will receive a subsidy of 10% of the invoice value after the sale.
Loans will be allocated for the purchase of equipment for storage and primary processing of raw cotton at the Central Bank's main interest rate for a period of 3 years (with a grace period of 6 months). The loan recipient must engage solely in cotton processing without the right to purchase it.
The Ministry of Agriculture has been instructed to organize the direct transfer of information on the weighing of cotton and grain at collection points into the online system "Khosil Kabuli." This data will be integrated with the systems of the Ministry of Economy and Finance and UzRTSB.
Earlier, Spot reported that subsidies are planned for farmers to purchase seedlings for planting along the fields.