Uzbekistan Is Adopting a New Wheat Trading System


Oct 10, 2022 | Agricultural Markets News

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Uzbekistan is the most populated country in Central Asia, with 35.8 million people. The country produced 6.0 million tons of Wheat in 2021/2022. The key areas for Grain production in Uzbekistan are the southern regions of the country – Kashkadarya, Samarkand, Jizzakh, Ferghana, Tashkent, and Surkhandarya. Timely rainfall in these areas provided enough moisture for the 2022 harvest.

FAS USDA analysts estimate Wheat production in Uzbekistan in 2022/23 MY at 6.6 million tons, 6% more than last month and 10% more than last year. The harvested area under the crop is estimated at 1.4 million hectares, which is 3% more than last year.

According to the USDA data, domestic Wheat consumption will reach 8.5 million tons in Uzbekistan in 2022/23 MY, up 1 % y/y. It is the largest figure among all key consumers of Wheat in Central Asia. Uzbek consumption will be higher than that of Kazakhstan by almost 37%. Notably, the forecast domestic consumption of Wheat in Uzbekistan in 2022/23 MY will exceed the same figure for Afghanistan by nearly 8%. Afghan Wheat consumption is expected at 7.9 million tons.

In Uzbekistan, Wheat production will cover 78% of expected domestic consumption in the next season. At the same time, Kazakhstan will consume only 48% of the total expected production domestically. Uzbekistan is a strategic buyer of Kazakh Grain and flour. The lion’s share of domestic exports are shipments to Uzbekistan. The export of Kazakh Wheat and barley to this country is growing every year, regardless of the production of cereals of Uzbek origin.

According to the USDA, in 2022/23 MY, Kazakhstan will export 8 million tons of Wheat and Wheat flour in Grain equivalent, while Uzbekistan only 1.5 million tons. USDA data also showed that the country’s opening stocks were 1.3 million tons in 2021-2022, with imports of 3.2 million tons of Wheat. For 2022-2023 MY, it will be 0.9 million tons and 3.5 million tons, respectively.

In 2020, Uzbekistan imported Wheat worth $598 million, becoming the 24th largest importer of Wheat in the world. At the same year, Wheat was the 3rd most imported product in the country. Russia, Belarus, and Serbia were the largest import markets after Kazakhstan.

Uzbekistan’s New Wheat Exchange System

The President of the Republic of Uzbekistan noted that against the backdrop of a rapid rise in food prices on world markets, the price of one ton of Wheat on international exchanges is $400, which is 30% more than at the beginning of the year. The President criticized the old system of state Grain enterprises, which does not benefit either Grain producers or processors.

From June 1, after the completion of all necessary organizational work, a transition to market prices is being made when purchasing and selling Grain by the state. The state will create all conditions for farmers and clusters to put their Grain on the stock exchange. The price of one ton of wheal purchased for state needs will be increased from last year’s 1.55 million to 3 million Soums (Uzbek currency) for this year’s harvest, said President Shavkat Mirziyoyev. 

Officials were instructed to organize the registration of farmers and Grain-growing clusters that place Grain on the exchange and assign brokers to them and train them in exchange trading. Shavkat Mirziyoyev emphasized: “The real owners of Grain are farmers and clusters. From now on, it is strictly forbidden to seize Grain from farmers under the pretext of not fulfilling the plan in the area, the need for feed for livestock, poultry, and fish farming. There will be no restrictions on the movement of Grain sold through the exchange. 

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