Export growth in Uzbekistan is supported by high prices for gold, uranium, and copper. This was stated in the review of the monetary policy of the Central Bank for the first quarter.
In January-March, the volume of exports increased by 10% compared to the first quarter of last year (exports excluding gold grew by 9.6%). The export growth was supported by high prices for gold, uranium, and copper amid high global uncertainty. While cotton prices returned to last year's levels after a significant increase in February, there remains high uncertainty regarding the future price trajectory.
Due to weakening global demand and declining prices for some goods, exports of colored and black metals and products thereof fell by 10%, as well as machinery and transport equipment by 4.5%.
According to the Central Bank, the dynamics of export growth (excluding gold) were in line with the main scenario forecast. The main factors driving the rise in gold prices are the preservation of geopolitical uncertainty, expectations that leading central banks will begin easing monetary conditions by the end of this year, and the increased demand for this precious metal.
The regulator notes that the dynamics of exports excluding gold this year could be supported by the rise in uranium prices due to the increasing role of nuclear energy in the world and the rise in copper prices due to positive trends in China's manufacturing sector.
Due to the aforementioned factors, it is forecasted that the overall export growth will range from 9-12%, excluding gold - 12-14%.
In the first quarter, the pace of import growth slowed to 3.8%, explained by a high base set against the import of transport vehicles (including airplanes) last year. Excluding machinery and equipment supplies, the indicator stood at around 8%.
Imports of food products decreased by 9.5% due to the decline in global prices for meat, oil, and wheat, as well as sufficient levels of internal reserves and production capacities. This trend is also observed in the import of chemical products (-3.7%). Imports of industrial goods (petroleum products, black metals) remain stably high, as noted by the Central Bank.
Against the backdrop of reduced imports of food products and ongoing reforms, expansion of production capacities, and further growth in the supply of energy resources, black metals, machinery, and equipment to Uzbekistan, the Central Bank's import growth forecast remains at 10-12%.
In the budget message of Uzbekistan, when forming the revenue forecast of the state budget for 2024, average annual prices for gold of $1800 per troy ounce and copper at $7800 are set. As mentioned earlier, gold prices have hit records, exceeding $2400.
The price of copper has again exceeded $10,000 per ton due to signs of recovery in global manufacturing activity and expectations of a reduction in US Federal Reserve interest rates. Goldman Sachs warned of the risk of a severe copper deficit due to limited supply and raised its year-end price forecast to $12,000 per ton. In 2021, it was reported that Uzbekistan earns $2.5 billion annually from copper.
According to Chapter 8 of the Budget Code, the revenues of the Reconstruction and Development Fund (the country's sovereign fund) are formed from receipts from the excess of the world price for strategic resources (gold, copper, and others) over the cutoff price established by the president's decisions when approving the forecast of key macroeconomic indicators and parameters of the state budget, as well as other sources.
Uranium prices on the world market have been steadily rising in recent years. For comparison: back in 2020-2021, prices were at $30 per pound, after which, after several jumps, they reached a maximum in January 2024 - $105.6 per pound. In the first quarter, prices gradually declined, however, after the bill banning the import of nuclear fuel from Russia, approved by the US Senate, quotes began to rise again.
The US Department of Energy previously announced plans to build 200 GW of new nuclear generation by 2050. Currently, the capacity of nuclear power plants in the US is 94.7 GW, their share in the country's energy balance is 19.6%.
On May 2, President of Uzbekistan, while telling investors about partnership opportunities, emphasized that the country has deposits of more than 30 rare earth metals. Shavkat Mirziyoyev stated that Uzbekistan is working on agreements for cooperation in the field of critical raw materials with the US and the UK, with such an agreement already reached with the European Union in April.
The Deputy Minister of Mining and Geology and CEO of Navoi Mining Jamol Fayzullaev previously stated that in 2024, there are plans to significantly increase the volume of exploration work and conduct exploration over an area of over 1 million meters, as well as drilling work over an area of 3.8 million meters for uranium extraction.
Additionally, there are plans to increase uranium production by 1.5 times and reduce its cost by 20.1%.
