Report Highlights:

The government of Uzbekistan (GOU) has been encouraging the transition of agricultural land from water-inefficient cotton to high value alternatives such as tree fruit, vine crops and vegetables. The majority of these products are consumed domestically, but GOU policies have led to the establishment of thousands of orchards, vineyards or farms that could contribute to an increase in exports to neighbors such as Russia and Kazakhstan, as well as to EU markets. Key to export success will be investments in post-harvest management and distribution technologies.

General Information:

I. Uzbekistan Fresh Deciduous and Stone fruits

PRODUCTION

Uzbekistan is one the leading producers of fresh deciduous and stone fruits in Central Asia. According to Food and Agriculture Organization (FAO) statistics, Uzbekistan is among the top five producers of apricots in the world, the sixth largest producer of cherries, and 17th in apple production. In the past 10 years, Uzbekistan increased the total area of fruits orchards 1.2 times.

Uzbekistan’s continental climate with hot summers is ideal for growing apple, pears, pomegranates, cherries, apricots, peaches and other popular fruit crops. The sector of deciduous, stone fruits and berries is one of fastest developing and prospective areas in Uzbekistan’s agriculture. Moreover, since 2005, the increased production of fruits and berries was considerably higher than that of planted areas, due to an increase in yields. Fruits and berries production has increased 97.9 percent in the past decade. The considerable production growth is mainly attributed to increased domestic demand and growing exports.

Over the last four years, the Government of Uzbekistan (GOU) has adopted several decrees and acts to further develop fruit production, renovate existing fruit orchards, and establish new ones. The GOU has recognized the importance of alternative crops (fruits and vegetables) to the national economy. More than 25,000 hectares (ha) of new orchards were established in Uzbekistan over the past four years, and the GOU is planning to establish an additional 15,000 ha of high-density orchards in 2014. This reflects a gradual transition from inefficient cotton production to other high-value crops, which use water and other inputs more efficiently.

One of the major problems existing in this sector is postharvest losses resulting from improper harvesting (damage during harvesting), poor handling, poor hygiene in packaging (wooden pallets are not disinfected) and inadequate storage after harvesting. Usually small growers do not have packing centers that collect large amounts of fresh fruits, store, calibrate and package the produce for the local or export markets. Most are primary producers of fruits and mainly concentrate on production, giving limited attention to harvesting, which results in bruises and damage to products. Also, little attention is given to the temperature of the product during and after harvest, which is critical to the later stages of processing, packaging, storage, distribution and sale of fruits.

In 2013, the weather conditions were favorable for fruit growers, and based on preliminary official data, CY2013 total fruit production is estimated at 2.26 million tons. CY2014 total fruit production is forecast to increase to 2.47 million tons.

CONSUMPTION

About 69 percent of Uzbekistan’s deciduous and stone fruits crop is consumed fresh, while 11 percent is exported. About 20 percent, on average, is destined for processing (jams, juices, dried fruits).

TRADE

Annually, about 11 percent of Uzbekistan’s deciduous and stone fruits are exported. Uzbekistan’s CY2013 fruit exports are estimated at 250,000 tons. CY2014 fruit exports are forecast preliminarily at the same level as CY2013. Major fruit exports are cherries, apples, apricots and melons. Uzbekistan’s main export markets are its neighboring Commonwealth of Independent States (CIS) republics (in particular Russia and Kazakhstan), as well as some European and Asian countries. Last September, during International Fair “Riga Food 2013” Uzbekistan trading companies reportedly signed export contracts worth of over US$ 100 million for delivery of fruits and vegetables to markets in Latvia.

As for fruit imports into Uzbekistan, major imported fruit items include citrus products like oranges, tangerines, grapefruits, and lemons, as well as bananas and kiwi. Most citrus and other imported fruits originate from Iran, Turkey, Pakistan, Georgia and China. Official statistics on fruit imports volumes are not available.

II. VEGETABLES (including potato)

PRODUCTION

According to official sources, Uzbekistan’s CY2013 total vegetable production is estimated at 10.76 million tons, which is 8.8 percent more than in CY2012. Vegetable production in CY2014 is forecast to increase to 11.28 million tons. The top three vegetable producing regions in the republic are Tashkent (2.05 million tons), Samarkand (1.83 million tons) and Andijon (1.43 million tons). These three regions produce almost half of Uzbekistan’s total vegetable volume.

Since 2010, Uzbekistan increased its total vegetable planted area from 243,800 ha to 265,300 ha, and the yields have increased from 33 tons/ha to 41 tons/ha over the same period.

CONSUMPTION

About 81 percent of Uzbekistan’s vegetable crop is consumed fresh, 11.3 percent is processed by the domestic food industry, 4.3 percent is utilized for seeds, and the remaining 3.4 percent is exported. Most fresh vegetables are grown by private farmers and small household farms and supplied to local markets. Also, there are large Agro-firms, which grow and supply vegetables under contract to fruit/vegetable processing companies.

TRADE

Uzbekistan’s CY2013 vegetable exports are estimated at 337,000 tons, and CY2014 exports are forecast at 300,000 tons. Major vegetable exports are tomatoes, cabbage and carrots. Uzbekistan’s major export markets are the neighboring CIS countries (specifically Russia and Kazakhstan).

Fruit and Vegetable Processing Industry Potential and Challenges

The Food Processing Industry is one of the fastest developing sectors of the economy. Given Uzbekistan’s potential to develop into a major food exporter to Central Asia, Russia, and Eastern Europe, the demand for modern packaging and processing equipment could greatly expand if the agricultural sector is reformed and trade barriers are eliminated. In accordance with a GOU decree on expanding and developing the food sector, the GOU plans to build and renovate 104 plants specialized in processing fruit, vegetables and grapes by 2016. Most of these plants will be established in the Surkhandarya, Tashkent, Namangan and Andijon regions, and 78 of them will be newly constructed plants equipped with new equipment and technologies. The remaining 26 plants (of 104) are planned to be renovated in accordance with modern standards. This will allow an increase in annual total processing capacity of 63,100 tons. Experts believe that further development would require more investment into processing, packaging, and cold storage facilities. According to the GOU investment program, during 2013-2015 the local food processing industry plans to implement projects worth $60 million, mainly aimed at establishing new production lines for vegetable and fruit juices, and canned products. By 2016, Uzbekistan targets the annual production of 610 million units of canned fruits and vegetables (460 million units in 2011), 155,000 tons of dried fruit (123,000 tons in 2011), 220 million cans of fruit juice (155 million cans in 2011) and 35 million jars of tomato paste (30 million jars in 2011).

The sector is open to companies interested in juice, vegetables and fruits processing, as well as manufacturers of equipment to process, label, and package products. The GOU is trying to encourage private sector development in these areas, but real agricultural reform will be necessary if its efforts are to make a significant difference in the sector’s development. There is a high demand for packaging materials, such as cardboard, paper, glass, aluminum foil, and shrink wrap, but these materials are not produced in the country. Small scale processing equipment is in demand and is more affordable for small businesses. Cold storage warehouse equipment is also in big demand.

Uzbekistan’s food processing industry needs newer technology and equipment related to cooling, processing, packaging and storage to improve the quality and longevity of fruits and vegetables. Integrated chains of production need to be introduced to maintain the cold chain and utilize new technologies and best practices throughout production, transportation, processing and storage of sensitive categories of fruit and vegetables to improve quality, safety and efficacy.

GRAPES

PRODUCTION

Uzbekistan is the largest table grape producer in Central Asia and one of the leading fresh grape exporters in the region. Most table grapes are grown in the south, especially in Samarkand, the Surkhandarya regions, the Ferghana Valley, as well as in the Tashkent region. The long warm weather period from early spring to late autumn allows farmers to grow more than 37 varieties of grapes. The most widespread grape varieties used in wine production are Soyaki (champagne, cognac), Saperavi (table and dessert wines), Rkatsiteli (dessert wines), May Black (dessert wines), Rosy Muscat (dessert wines), Hindogni (dessert and table wines), Bayan-Shirin (dry wines, champagne, cognac), and Aleatico (vintage and dessert wines). Popular grape varieties for fresh consumption are Khusayni, Rizamat, Kishmish and Damskiy palchik.

Over the past 4-5 years, the GOU has paid considerable attention to the development of grape production and expansion of vineyard areas. In March 2013, the GOU adopted a special decree on the development of viticulture in the republic during 2013-2015. Within the framework of this decree, they plan to optimize spacing and the regionalization of prospective grape varieties, as well as expand the planted area of vineyards. Also, the GOU decree targets assistance to farmers and other enterprises in the wine industry to market their products for export through specialized trading companies, as well assist agro-firms to establish their own trade houses in CIS and other foreign countries. The GOU also plans to assist in pre-financing export contracts for grape producers and processors. In 2013-2014, the GOU program aims to establish 32 new nursery-plantations specialized in the production of seedlings of prospective high-yield grape varieties. In addition, the GOU decree calls for the establishment of 22,597 new grapes plantations during 2013-2015, of which 9,603 are for producing table grape varieties, 4,034 are for producing raisin varieties, and 8,960 are for producing technical varieties.

According to preliminary official estimates, total grape planted area equaled 133,000 ha in 2013, compared to 126,900 ha in 2012. In CY2014 and 2015 the total area of vineyards is officially forecast to increase to 140,000 ha and 150,000 ha respectively. CY2013 total grape production is estimated preliminarily at 1.32 million tons, which is 9.7 percent higher than in CY2012. CY2014 grape production is forecast to increase to 1.36 million tons.

CONSUMPTION

About 73 percent of Uzbekistan’s grape crop is consumed fresh, 23 percent is processed domestically, and the remaining 4 percent is exported. One of the biggest grape processing companies in the country is Uzvinsanoat Holding Company, whose main activity is alcohol and wine production, as well as juices. By the end of 2013, Uzvinsanoat Holding Company had 120 grape processing enterprises all over the country, of which 83 were wineries. According to the company’s forecasts, the number of its wineries will increase to 90 and production volumes will be raised to 215,000 tons by the end of 2014. Nowadays, Uzbekistan wine production and its quality are developing very rapidly. Some wines are exported to neighboring countries and some to Europe.

Uzbekistan also produces about 55,000-60,000 tons of raisins annually. Roughly half of this production is exported.

TRADE

According to the State Statistics Committee, Uzbekistan exported 44,000 tons of fresh table grapes in CY2013. CY2014 exports of fresh grape are forecast at 60,000 tons. Major export destinations are neighboring CIS countries, specifically Kazakhstan and Russia. Also, Uzbekistan exports about 35,000-40,000 tons of raisins annually, mainly to neighboring countries and some to Europe, and even some small volumes to the United States. Kazakhstan is one of the largest importers of Uzbek raisins. In CY2013, Kazakhstan imported almost half of its raisin from Uzbekistan