COTTON WILL BECOME MORE EXPENSIVE

Advanced members of international organizations including the World Trade Organization will abolish direct and indirect cotton subsidies by autumn 2006. It will make raw cotton more expensive, and Russia that is exporting cotton by 80-85%, is directly affected. Central Asian cotton comes to Russia via numerous intermediaries nowadays. Direct deliveries are but being established at this point but the Russian textile industry is chronically short of raw cotton.

Regularly buying cotton abroad, Russia has cultivated cotton on the Lower Volga since the second half of the 1990's. According to the newspaper Rossiiskaya Biznes-Gazeta, the yield was only 17-21 centners at first but increased to 20-22.5 centners by 2005-2006 (nearly as much as the average yield in Uzbekistan and 13-15% more than in Kazakhstan and Kyrgyzstan). Specialists maintain that the cotton from Astrakhan will remain in high demand for years to come. Producers sell it at $1.2-1.5 per kilogram nowadays or 75-85% of the average cotton export price. The growing yield and increasing areas under crop will bring the price down. Areas under crop will amount to 13,000-13,500 hectares by 2007 (against 11,300 nowadays) and the output will reach 420 tons against 300 tons now. Areas under crop will also expand in Stavropol, Dagestan, and Kalmykia - but that depends on the demand. It may be added that up to 80% of the Russian cotton is provided directly by producers.

Rossiiskaya Biznes-Gazeta, July 4, 2006