COTTON KINGS
Formerly a powerhouse industry, Azerbaijan seeks to restore cotton production in the country to levels during its operational prime.
During its tenure as part of the Soviet Union, Azerbaijan was one of the leading cotton producers among all Soviet countries. After being famous for high levels of cotton production for many years, the interest in agriculture, and more specifically the cotton industry, took a backseat to oil and gas advancements. In addition, the growing indifference with the crop stemmed from the low cotton margins, a lack of up-to-date technology needed to stay competitive, and the decline of cotton prices on the global market. The cotton industry is now merely a shell of its former self in Azerbaijan, with the State Statistics Committee reporting that the 35,000 tons of cotton procured in Azerbaijan in 2015 was not only almost 15% lower than the previous year, but also the lowest level since 2010. It is also markedly lower than the 831,000 tons of cotton that Azerbaijan produced in 1981, for example.
The high production areas of cotton in Azerbaijan can be found in the Beylagan, Zardab, Sabirabad, Saatli, and Barda regions of the country. With the advent of new technologies combined with the favorable climate and soil in Azerbaijan, the country has the potential to reach the high levels previously enjoyed throughout the Republic. While the overall tonnage of cotton was lower in 2015 than 2014, an interesting statistic shows that the average cotton yield per hectare in 2015 was actually 4.5% greater than the previous year meaning that the overall efficiency of the cotton industry is continuing to make strides. This suggests that a greater focus in this area would easily increase cotton levels. Related to this effort, the Azerbaijan Scientific Institute of Cotton located in Ganja has been working on the creation of a more pest resistant and productive strain of cotton. With this renewed focus combining the innovation of the country's top scientists and economic minds, there is good reason to believe that cotton is starting its timely resurgence as an important product in the country's economy and export efforts.
Another point of interest in the cotton efforts of Azerbaijan is the pricing of the crop. The Ministry of Economy and Industry has reported that the purchasing price of cotton will increase in 2016 to the benefit of local producers. Speaking on the issue of the price of cotton at a conference between Azerbaijani and Turkish businesses, Minister of Economy and Industry Shahin Mustafayev stated, "When setting the purchasing price, the companies should consider the world prices for cotton and devaluation rate in the country. We are in negotiations with these companies to propose more favorable prices for agricultural producers." He also added that allowing cotton growers access to appropriate financial resources is necessary to move forward, part of a larger nationwide effort to improve financial access to SMEs in Azerbaijan.
In addition, China has shown its interest in expanding its relations with Azerbaijan in the development of the cotton industry. There are ongoing negotiations between Azerbaijan and Chinese giant Xinjiang Yinlong International Agriculture Cooperation to create a cotton growing partnership. This potential partnership will allow Azerbaijan to improve its seeding technology and cotton processing efficiency, and could offer valuable lessons learned from the country that produces the most cotton in the world. In addition, the number of jobs available in the cotton industry will increase dramatically over 2016 in order to match the new, ambitious goals of increased cotton procurement. Multiple reports confirm that an 80% increase will take place in the amount of hectares of land used for cotton cultivating, resulting in an expected 70,000 tons of cotton in 2016, or a 100% increase compared to 2015 levels. This is an ambitious plan. Cotton is in constant high demand on the world market, which will also help the country accomplish the national goal of increasing domestic product exports. Cotton will be on the forefront of Azerbaijan's agricultural efforts over the next few years.
COTTON KINGS
TABLE OF CONTENTS
Year In Review
Good Times Ahead
<strong></strong><strong>In a year dominated by the overarching theme of low hydrocarbons prices, Azerbaijan showed resilience and verve in putting in place bold measures both to counter the slump in energy prices and put its economy on a surer footing.</strong>
read articleReview: Diplomacy
Operation Outreach
In 2015, Azerbaijan's military budget increased by a notable 27%, to $4.8 billion, or 17.9% of the government's total budget for the year. The first Azerbaijan Defence Exhibition (ADEX 2014), drew over 200 companies from 34 countries, including Russia and the US.
read articleInterview
Rufat Mammadov, President, Azerbaijan Export and Investment Promotion Foundation (AZPROMO)
TBY talks to Rufat Mammadov, President of the Azerbaijan Export and Investment Promotion Foundation (AZPROMO), on large-scale events and their ability to attract FDI and the potential Iran may hold.
read articleReview: Banking
More Interest
In a sector faced with relatively flat growth for 2015-16, new opportunities are still there aplenty, led by the nascent Islamic banking sector, e-banking, and microfinance initiatives. Together, these areas should make banking more diversified and less reliant on a buoyant energy sector for its capital inlay.
read articleReview: Capital Markets
Taking Stock
As Azerbaijan grapples with the knock-on effects of low hydrocarbon prices, the Baku Stock Exchange (BSE) finds itself at the center of the country's efforts to stave off a budget deficit this year. In January, the government announced plans to sell $500 million worth of bonds on the BSE.
read articleInterview
Khanlar Fatiyev, , Chairman of the Supervisory Board, Ganja Automobile Plant Production Association
TBY talks to Khanlar Fatiyev, Chairman of the Supervisory Board of the Ganja Automobile Plant Production Association, on the role of the plant in driving growth in the non-oil sector.
read articleReview: Agriculture
Lots More
Farms across the country are pursuing a policy of increased yields for year-round fruit and in the wheat harvest to stave off an over-reliance on imports. With carefully targeted increases in exports, better routes to port and to market, and greater sophistication of agricultural facilities, farming could soon be the morning star of Azerbaijan's diversified economy.
read articleReview: Education
Baku to School
Azerbaijan's culture has always harbored a deep respect for educational values. This is embodied in the country's Azerbaijan 2020 mission statement, which seeks to raise standards across the sector and introduce ICT as a standard part of the learning experience at all levels.
read articleInterview
Elkhan Mammadov,, Secretary General, Association of Football Federations of Azerbaijan (AFFA)
TBY talks to Elkhan Mammadov, Secretary General of the Association of Football Federations of Azerbaijan (AFFA), on the experience Azerbaijan is gaining in hosting international events.
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