PRESIDENTIAL DECREE OF THE REPUBLIC OF UZBEKISTAN

of January 17, 2025 No. UP-7

About measures for consecutive continuation of application of market mechanisms in case of cultivation and realization of seed cotton

For the purpose of adaptation of financing of system of cultivation and realization of seed cotton to market mechanisms, optimization of cost of cotton, removal of realization of seed cotton through the exchange biddings on new level, and also increases in material interest of farms and processors:

1. Determine that since harvest of cotton of 2025:

The Uzbek republican commodity and raw exchange (further - the Exchange) on November 1 calendar year (on February 1 - for harvest of 2025) proceeding from the average quotation of cotton fiber for the last 6 months of future quotations at the New York exchange determines the starting price (first class, second class) of seed cotton for harvest of the next year which announces on the official website of the Exchange;

irrespective of pattern of ownership between all farms on production of seed cotton (further - farms) and clusters, and also the textile companies having chain of conversion of seed cotton and production of yarn (further - processors), purchase and sale agreements (future, forward and spot) on delivery of seed cotton (further - agreements) are signed at the auction held separately on each region (The Republic of Karakalpakstan or the respective area) on section of seed cotton of the Exchange;

the agreements signed between farms and processors are drawn up through the exchange auction held on the basis of the free choice of the parties by independent election of delivery dates as farms, and also one or several buyers;

all agreements at the Exchange are signed between farms and processors who are present at the database integrated with Agroportal.

2. Establish procedure according to which since harvest of cotton of 2025:

a) future agreements are signed between farms and processors from November 1 of calendar year to June 1 of the next year at the price which is freely created at the exchange, but not below the announced starting price.

At the same time the future agreement is the basis for allocation of soft credit at the expense of resources of Fund of the state support of agricultural industry (further - Fund) which is allocated proceeding from the announced starting price;

b) forward agreements are signed between farms and processors from November 1 of calendar year to March 1 of the next year at the mutually agreed prices.

At the same time expenses on cultivation of seed cotton are made at the expense of own means of farms and processors or commercial credits;

c) spot agreements are signed in real time on the amounts of seed cotton which are stored in warehouse at the price, mutually agreed between farms and processors. At the same time:

in case of allocation at the expense of resources of Fund to bank it is provided to farms of soft credits liquid property in the amount of 50 percent from credit amount;

the farms planning execution of spot agreements shall till March 1 of each fruitful year (till May 1 - for harvest of 2025) to introduce in Agroportal the conclusion about compliance of the existing warehouses (storages) for storage of seed cotton to the established requirements issued by Inspectorate for control of agro-industrial complex and other relevant departments or the lease agreement on temporary storage in the warehouses having the similar conclusion;

d) the farms which do not have warehouses for storage or lease agreements draw up till March 1 of each fruitful year forward agreements or till June 1 - future agreements on actually grown up raw cotton.

3. Determine that since harvest of 2025:

the subsidy in the amount of 10 percent of the created invoice value is allocated to the farms which grew up raw cotton at the expense of own means and commercial credits and implemented it at the Exchange;

the procedure for return to the farms which extinguished until the end of fruitful year (till December 31 of the corresponding year) the soft credits obtained for cultivation of seed cotton, 4 percent Item of interest payments on these credits as subsidy takes root;

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