As EastFruit experts have already reported, the fruit and vegetable business of Uzbekistan received an unexpected blow in May 2024 in the form of minimum export prices for fresh produce, which sharply worsened the conditions and opportunities for exports of vegetables and fruits. We can already state that the negative consequences of such a decision were not long in coming. During the first month exporters of vegetables and fruits, farmers who grow them, and the country's budget have suffered significant losses. All this is happening against the background of stagnation of fruit and vegetable exports and an extremely difficult situation in some of its large segments, such as, for example, the greenhouse business, which Uzbekistan is gradually losing in competition with Turkmenistan.
In this article, EastFruit provides specific examples of the negative impact of the minimum export prices for vegetables and fruits on the participants of the value chain.
Let us recall that at the beginning of May 2024, recommended prices for the export of fruits and vegetables were introduced in Uzbekistan. Then exporters were allowed to supply vegetables and fruits abroad at prices no lower than 20% of the recommended prices. However, by a resolution of the Cabinet of Ministers of May 11, 2024, the recommended prices were replaced by the minimum acceptable ones. Seems like the government officials have not thought that prices for vegetables and fruits fluctuate significantly, both by country and by quality category – sometimes by as much as 10 times! No one was also concerned that prices for fruits and vegetables, especially early ones, which Uzbekistan specializes in, often change by a factor of 2 or more per day, so setting minimum prices once a week initially looked like a stillborn idea.
According to Nodirbek Musaev, head of the export company Musaevs Exim LLC, such a measure of export price control and the mechanism for its implementation have given rise to a number of problems that Uzbek exporters face at the height of the season for shipments of fresh vegetables and fruits from Uzbekistan.
"The minimum export prices for fruits and vegetables are reviewed and set once a week. After prices are set, everyone must wait another two days for their official application. But during the export season of fresh vegetables and fruits, the market is much more dynamic, i.e. prices can change every day. Especially in the active phase of harvesting wholesale prices for them may fall from day to day. There is a completely inflexible mechanism for establishing minimum acceptable export prices, which in turn creates many problems for Uzbek exporters and growers," explains Nodirbek Musaev.
Read the full article at east-fruit.com