Incorrect pricing policy leads to decrease in cotton production in Azerbaijan

This year, the area under cotton in Azerbaijan amounted to 23 thousand hectares, which is 21.3% less than in 2012, the State Statistics Committee told Turan. In 2012, the area under cotton totaled 29,217 hectares.

The declining interest in cotton growing farmers because of low purchase prices of monopoly for the past 10 years has led to the fact that the area under cotton was reduced to a minimum, and in 2009 the country's cotton was harvested from 21.1 million hectares. By 2012, the situation began to improve in Azerbaijan was collected 56.8 tons of raw cotton. However, reducing the acreage shows that the production will be reduced again.

The Ministry of Agriculture said Turan, that this year's cotton ginning factories have signed contracts with farmers for the purchase of raw cotton at last year's level: price on average 410-420 manats per 1 ton. In the cotton companies believe that this price is very high at the current low prices for cotton fiber on the world market.

They are partly right. On 6 May 2013 the price of cotton fiber on the world market was $ 2500 (AZN 1,950) per 1 ton and it continues to grow. In Azerbaijan, a ton of cotton fiber produced on price of AZN 1,500 or $ 1,900. But it should be noted that in recent years, world prices were high at around $ 5,000 per ton. Two years ago, the first time they have dropped to $ 3900 and then dropped to $ 2,000. However, the purchase prices in Azerbaijan remained low and inadequate to the world prices then, which led to decrease in the production.

Trends in production of cotton in the world show a fall. According to preliminary estimates of global production of cotton in the 2013-14 season will be reduced by 10.9% to 23.07 million tons. At the same time, global consumption will grow by 4.9% to 24.25 million tons. This means that prices will continue to rise. World stocks at the end of the season 2013-14 will be reduced by 11.8% to 15.31 million tons, while the ratio of stocks to consumption will be 63%. - 08B-