02.05.2024, 19:15

Cheap Russian flour threatens local grain processing in Kazakhstan


In Kazakhstan, many mills have stopped operating due to high competition with Russian flour, jeopardizing local grain processing. In Pavlodar Oblast, for example, only half of the 15 operating mills continue to function, and that with only 20-30% utilization. The main reason for the stoppage of production is the lack of raw materials and active saturation of the market with Russian flour, the cost of which is much lower than local flour.


At the meeting of the regional Chamber of Entrepreneurs "Atameken" representatives of the industry expressed concern that the price of Russian flour is only 100 tenge per kilogram, while Kazakhstani flour of the first grade costs 150 tenge. The impact of cheap Russian flour is being felt across the country, as not only flour mills, but also other agricultural enterprises, including milk producers, are shutting down due to lack of competitiveness.


In addition, difficulties in purchasing grain on the domestic market lead to additional financial losses, as transportation of grain by rail significantly increases the cost of flour production. This reduces export opportunities, exacerbating an already difficult market situation.


This problem affects not only Kazakh producers, but also importers to other countries, such as Uzbekistan and Kyrgyzstan, where Russian raw materials are also imported at a zero rate, making local flour even less competitive. Thus, the low cost of Russian flour jeopardizes the entire grain processing industry in Kazakhstan, undermining the stability and economic development of the agricultural sector.