Uzbekistan increases the volume of exports of clothing to Kazakhstan
Tashkent, Uzbekistan (UzDaily.com) -- The development of the light industry of Uzbekistan and the support of manufacturers allowed in 2020 to significantly increase the volume of exports of clothing and textiles to Kazakhstan. However, the change in consumer preferences towards the cheaper segment reduced the cost volume of supplies by 7%.
According to the Bureau of National Statistics of the Agency for Strategic Planning and Reforms of the Republic of Kazakhstan, in 2020, 13 thousand tons of clothing and textiles were supplied from Uzbekistan to Kazakhstan. This is 30% more than in 2019. Thus, for the second year, the Republic of Uzbekistan ranks second in terms of supplies of light industry goods to the Republic of Kazakhstan (in kind). As for the value, in 2020, manufacturers from the Republic of Uzbekistan earned US$20.8 million from selling clothes to Kazakhstanis, which is 7% less than the same period in 2019. In general, the share of Uzbekistan in imports of clothing to Kazakhstan is 3%.
Analysts of the JSC "Center for the Development of Trade Policy" QazTrade "(Kazakhstan), examining the trade turnover between Kazakhstan and Uzbekistan, note that the Republic of Uzbekistan in mutual trade in light industry goods occupies 98% of the value. Of the US$50.4 million in trade turnover, US$49.4 million is the supply of Uzbek things, textiles, carpets, footwear to Kazakhstan. Kazakhstani export of light industry to the Republic of Uzbekistan is only US$983.7 thousand.
Ruslan Abaturov, chief researcher at the Center for Economic Research and Reforms of Uzbekistan (CERR), notes that the increase in the supply of light industry goods to Kazakhstan is due to the fact that the Republic has increased the import of non-knitted children's and women's clothing. This is how 2020 differs from the situation in 2019.
“On the one hand, the pandemic has led to a drop in demand in Kazakhstan for certain categories of clothing from Uzbek manufacturers. On the other hand, the growth in physical volumes is associated both with the diversification of exports / imports and with a change in consumer preferences in favor of cheaper goods. It should be noted that a certain part of textile products could be purchased for the needs of the social system,” notes Ruslan Abaturov.
The expert says that in 2020, especially in the first half of it, amid a pandemic, a drop in consumer demand for clothing was noted all over the world. But hospitals began to massively purchase both protective masks and clothing, as well as bedding. According to the CERR expert, customs statistics include clothing and textiles in this category, including for medical and social services. This may distort the established ratios of natural and value volumes of export / import and not quite correctly reflect how the demand for clothing from the population has changed.
Ruslan Abaturov believes that the light industry of Uzbekistan was able to get out of the lockdown crisis with a plus, only thanks to the reforms carried out in the past years.
“This is clearly seen from the fact that the production of textiles in the first quarter of last year increased by 14.8%, sewing - by 11.1% (versus 1.3% and 5.1% in the same period in 2019). That is, by 2020, the industry, including through the support measures provided in 2017-2019, has already strengthened and entered dynamic growth. In the period before the pandemic, domestic textile and clothing enterprises in Uzbekistan received benefits and preferences. In particular, they were exempted from paying taxes on profits, property, customs duties when importing raw materials or components not produced in Uzbekistan,” summed up the chief researcher at the Center for Economic Research.