In a move that threatens to further dampen the prospects of Uzbekistan's fruit and vegetable export industry, the nation's Cabinet of Ministers has implemented stringent price controls effective May 14, 2024, EastFruit reported.
The mandate dictates that previously suggested prices will now serve as the minimum allowable prices for fruits and vegetables destined for export. Exporting below these government-determined prices is strictly forbidden, irrespective of quality, variety, or other differentiating factors within the produce.
Such regulatory measures have historically proven detrimental, particularly impacting producers and small-scale exporters by constraining their market opportunities. The move not only diminishes the appeal for investment in agricultural production but also tarnishes Uzbekistan's allure as a trading partner for major importers, as long-term contractual partnerships become increasingly uncertain.
Critics argue that the direct imposition of price controls is unlikely to enhance tax revenue or currency regulation effectively. While larger corporations may possess the means to circumvent these minimum price constraints using sophisticated financial tools, the broader tax base is expected to contract, exacerbating economic challenges.
This latest development follows previous indications of Uzbekistan's struggle within the horticultural sector. Reports suggest the phased-out export of greenhouse vegetables, once a robust category for the nation's agricultural exports.
Furthermore, Uzbekistan's export performance in the fruit and vegetable sector has failed to demonstrate growth. Despite favorable global conditions, with Russia imposing import restrictions on these products from various countries, Uzbekistan's export figures have remained stagnant.
Recent data reveals a 10% decrease in export earnings in 2023, amounting to $777mn. However, concerns arise over the accuracy of these figures, as official reports allegedly inflate statistics by incorporating dry legumes into fruit and vegetable exports, misrepresenting the true state of the industry.
Over the past five years, export values have oscillated between $700mn and $900mn, with a concerning decline observed in the market share of fresh produce. Conversely, while the proportion of dried fruits within the export mix is on the rise, global demand and prices for these products are experiencing a downward trend, further complicating Uzbekistan's export outlook.
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