STATUS OF DOMESTIC AND GLOBAL VALUE
CHAINS IN UZBEKISTAN
Agriculture is one of the sectors of Uzbekistan’s economy, contributing 25% to the
country’s GDP, providing a third of national employment and almost half of total export
earnings. Uzbekistan continues to be the major supplier of fresh and processed fruits
and vegetables.
Horticulture is an important part of agricultural production, although the subsector
accounts for only about 16% of aggregate arable lands, in contrast to grains (47%) and
cotton (37% of fruits and vegetables is among the most profitable activities for both
dehkan (smallholder farms)51 and more commercial farms. The economic importance
of the subsector is therefore significant, considering that it accounts for more than
35% of the agricultural export value. Uzbekistan has become a major producer of
horticultural products in the region, placing the country among the world’s top 10
exporters in several categories of fruits, vegetables, and nuts. According to the Food and
Agriculture Organization (FAO) statistics, Uzbekistan exports of dried apricots are the
second largest in the world, while exports of fresh apricots from Uzbekistan are
the 4th largest, plums the 7th largest, cabbage the 8th, and raisins the 9th largest
worldwide. The country is the sixth largest producer of cherries, and 17th in apple
production; production of peaches and grapes from Uzbekistan is the 10th largest in the
world.52
Despite delayed returns and higher investment costs, horticultural crops generate
revenues to farmers that are significantly higher than wheat and cotton.53
The government has also made further efforts to liberalize the horticulture sector by
adopting a new resolution, 54 which allows horticulture farmers and agricultural
enterprises to sell their products directly in domestic and foreign markets.
By 2020,
the Government of Uzbekistan aims to have converted over 200,000 hectares into
horticulture production, away from cotton and wheat.55
According to the Ministry of Agriculture, Uzbekistan has trade ties with more than
80 countries and exports 180 different varieties of fresh and processed fruits and
vegetables. Uzbekistan annually exports fresh and dried fruits and vegetables products
to the amount of about 700,000 tons. Uzbekistan exports only 5%–6% of all produced
fresh agricultural products. In terms of value, this indicator varies depending on
the conjuncture of the main markets. The main markets for Uzbek products are Kazakhstan (67% of total exports), the Russian Federation (17%), Afghanistan (5%), the
Kyrgyz Republic (2%), and other countries (9%). Horticultural export revenues have
more than tripled, from about $500 million in 2006 to almost $1.2 billion in 2016. 56
(see Figure 25).
Uzbekistan exports to the Russian Federation and Kazakhstan because of proximity and
lower quality thresholds, though margins are far higher in Europe and East Asia.
Uzbekistan aims also to expand the marketing of fresh and processed horticulture
products to other countries, including Japan, the Republic of Korea, Saudi Arabia, United
Arab Emirates, as well as EU countries.
During the period 2017–2021, the production of food products is expected to increase
by 140%, including fruit and vegetables and grapes by 140%.
Export of fruit and vegetable products in 2021 will increase by 230% compared to 2016,
and the export of fruit and vegetable processed products by 200%.
Main players of the horticulture chain include growers, market consolidators or brokers,
wholesalers or traders, exporters, processing companies, supermarket chains, retail
markets, transportation enterprises, market administration, and others.
Growers include: (i) a large group of rural smallholding households (dehkans);
(ii) private (or commercial) farms; and (iii) agricultural enterprises (agrofirms). Dehkan
farms, according to the State Statistics Committee, account for more than 90% of
horticulture production while occupying 65% of total sown area under vegetables
(excluding melons), 43% under melons, and 20% under fruit crops (including grapes).
Brokers or consolidators: They are responsible for properly harvesting, sorting, grading,
and packing as per customers’ demand.
Wholesalers: Local wholesale markets, specialized trading companies wholesale
logistics centers to collect and transport products to the chain supermarkets in
the cities.
Exporters: National and private enterprises.
Processing companies: Horticulture products processing companies, specialized in
either extracting, drying, caning, and processing.
Supermarket chains: Food supermarket enterprises and large retail networks (Korzinka,
Makro, etc.)
Transportation: Large to single-owner transportation enterprises are involved in the
transportation of horticulture products from sites of production to processing centers,
wholesale markets, and then to retail distribution and export terminals.
Table 12 presents the strengths, weaknesses, opportunities, and threats (SWOT)
analysis of the horticulture value chain based on survey of value chain players.