How Sustainable Is the Export of Feed Flour: An Analysis of Potential Risks

Until recently, Kazakhstani farmers did not know what to do with tons of low-quality wheat left after the rainy harvest of 2023. Today, this grain has become the basis of a new and rapidly developing export direction that has supported prices and attracted foreign investment to the country. 

A Solution to a Forgotten Problem
As noted during a discussion by expert Yevgeny Karabanov, the main problem in 2023 was sprouted wheat of the 4th and 5th classes. “Farmers did not know where to put it,” recalls the expert. The solution came from China, which began actively purchasing feed flour — a product obtained by grinding such wheat without separating the bran. Demand was so high that the problem resolved itself. “By December, there was no more fifth-class wheat left. By May, the fourth-class wheat had disappeared in the country,” Karabanov emphasized.

Price Support and New Investments
This new market not only rid farmers of illiquid products but also had a direct impact on the entire sector:
• Price support: Active processing of feed grain into flour helped prevent domestic prices from falling further at a critical moment.
• Profit for processors: In the first half of the season, producers earned $20–25 profit from each ton of feed flour.
• Foreign investment: Many Chinese companies began creating subsidiaries in Kazakhstan and building feed flour production plants. According to Karabanov, these enterprises are essentially the initial stage of a compound feed plant, and in the future, they can be easily upgraded into full-scale production facilities.

The Main Risk — Dependence on China
Despite all the advantages, there is also a serious risk. The expert shared insider information that the central government of China has “begun to feel uneasy” about the large volumes of Kazakhstani feed flour imports, as this reduces the consumption of their own grain. “It is also important for them to support their own farmers. Therefore, at any moment there could be either a stop, or the introduction of a tariff,” Karabanov warned. This creates a potential threat for Kazakhstani producers, who are heavily dependent on a single sales market.

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