Significant Decrease in Kazakhstan's Wheat Exports
Kazakhstan's wheat exports plummeted by almost 40% in the first eight months of 2024, compared to the same period the previous year, according to Vice Minister of Trade and Integration Kairat Torebayev.
This significant decrease, attributed in part to a comparatively modest harvest, has also been influenced by price competition with Russia. Kazakh farmers exported just over 3 million tons of wheat from January to August. However, traditional buyers, including neighboring Central Asian states, Afghanistan, and Italy, have reduced their consumption of Kazakh wheat due to price dumping by Russia.
First Deputy Chairman of the Auyl agrarian party, Toleutai Rakhimbekov, noted that Kazakh grain struggles to compete with Russian grain, which is 1.5 times cheaper. He emphasized that the quality of Russian grain is higher due to greater use of fertilizers, pesticides, seed updates, and equipment upgrades by Russian farmers.
To tackle this challenge, Rakhimbekov proposed an increase in government subsidies to enable Kazakh farmers to regain lost market shares. As of October 17, Russia imposed a ban on imports of wheat and other products from Kazakhstan, citing "phytosanitary safety." This ban, although not specified in terms of duration, adds to the existing difficulties.
Kazakh MPs contend that the ban is unjustified and are urging the government to address the matter with Russian authorities. In light of these issues, Kazakhstan is seeking to expand its markets to Iran, Pakistan, Indonesia, Brazil, and Malaysia.
Previous expansion efforts towards China faltered in August when Beijing imposed a sharp increase in duties on Kazakh wheat exports, effectively reducing shipments to a trickle. The Kazakh government is currently engaged in addressing this tariff issue.
While Kazakhstan aims to export approximately 12 million tons of grain in the 2025 season, it has already seen a significant increase in grain exports during the 2024-2025 season, despite the challenges mentioned above. Logistics costs have risen significantly in the last two years, making it difficult for Kazakh producers to maintain their competitive edge in key export markets. Fierce competition from major exporters like Russia and the EU can indirectly impact Kazakh exports by setting lower market prices.
In an effort to counter these challenges, Kazakhstan has implemented subsidies for grain transportation to non-traditional markets such as North Africa and the Middle East to support exporters in accessing new markets despite higher logistics costs.
- The news of Kazakhstan's grain struggles in the international market, particularly against Russian competition, has been a topic of discussion in the realm of finance and business, as Kazakh farmers face challenges in maintaining their competitiveness.
- To counter the effects of price competition with Russia and other major exporters, Kazakhstan has taken steps to expand its markets in countries like Iran, Pakistan, Indonesia, Brazil, and Malaysia, and implemented subsidies for grain transportation to non-traditional markets like North Africa and the Middle East.
