Kazakh millers are concerned about the government's plans to subsidise grain exports instead of supporting the processing and supply of flour to Central Asian markets.
According to Inbusiness.kz, subsidising grain supplies to Afghanistan remains a hot topic of discussion in Kazakhstan's agricultural sector. Industry representatives agree that the problem of surplus agricultural raw materials must be addressed, but emphasise the importance of a sensible choice of export markets. On the Afghan front, the interests of two sides collide – grain traders and millers.
According to experts, the authorities' decision plays into the hands of neighbouring countries, which are developing their own processing industries using cheap raw materials from Kazakhstan.
It is noted that the Ministry of Agriculture previously published a draft resolution on subsidising transport costs for grain exports. The list of countries eligible for state support included the Central Asian republics and Afghanistan, which provoked outrage among Kazakh grain processors.
According to industry representatives, the problem is that Uzbekistan and Tajikistan use Kazakh grain to develop their own flour milling industries, and then export the finished product to the Afghan market.
"For domestic grain processing, adopting such a decision is tantamount to a complete closure of flour exports – this is clear even to a businessman unfamiliar with the intricacies of exporting grain and flour. But evidently, they have decided to sacrifice the millers in a big way, to close this painful and awkward topic for our Ministry of Agriculture with one decision. There's a paradox here – the president of our country tirelessly calls for developing exports of processed products. The government says the same. The country's Ministry of Agriculture also includes in its development indicators bringing the export of processed agricultural products up to 70%. But in reality, it's exactly the opposite.", said the chairman of the board of founders of the Union of Grain Processors of Kazakhstan, Yevgeniy Gan.
As it became known, Afghanistan is the main export market for Kazakh flour. According to experts, the Afghan side is also seeking to use access to Kazakh grain to develop its own processing industry.
"The cost of customs clearance for our flour was raised. This indicates that the Afghan authorities are interested in buying raw materials so they can mill their own product themselves. This is sound policy. Of course, they are still far from the level of Uzbek milling in terms of processing development, but this ambition is already being felt.", notes the vice-president of the Union of Grain Processors, Taisiya Kolegova.
Experts claim that the position of Kazakh export milling in its main market can no longer be called stable.
Representatives of the processing sector propose an alternative solution – to stimulate Kazakh agricultural producers to deliver grain for domestic processing.
"The capacities of the country's grain processing enterprises are currently only 39% utilised, and increasing grain processing volumes by at least 1 million tonnes for our enterprises requires no capital investment. The same amounts that we would put into paying transport costs across the territory of neighbouring states would go to our domestic enterprises, and the money would stay within the country. And every link in this chain – from the agricultural producer to the flour exporter – will feel real state support and the state's interest in their work.", emphasises the president of the Union of Grain Processors of Kazakhstan, Zhomart Motyshev.
According to his calculations, this approach would create a foundation for systematic support of grain processing product exports and would allow increasing product exports abroad to 70%. At the same time, millers consider it correct and logical to develop and expand grain exports in new directions, including the Black Sea ports, Azerbaijan, Georgia, the Baltic states, and China.