Kazakhstan Increases Grain Supplies While Losing Ground in Flour Exports

Kazakhstan's flour milling industry, traditionally a key pillar of the country's agricultural sector, is facing a systemic crisis that threatens the profitability and very existence of many enterprises. A shift in state focus towards subsidizing raw grain exports has led to a sharp rise in domestic wheat prices and, consequently, a decline in the production and export of flour. The situation is exacerbated by trade barriers from key importing nations.

Grain Subsidies Hit Processing Sector
Senator Olga Bulavkina presented alarming statistics and an analysis of the situation during a recent government report. According to her, since the spring of 2025, flour millers have found themselves in an extremely difficult position. The cause is a grain export subsidy mechanism, reaching 20,000–30,000 tenge per ton. This measure, intended to support farmers, triggered a chain reaction: domestic wheat prices soared from the usual 60,000–62,000 to 85,000–90,000 tenge per ton.

This price surge almost instantly made the processing of wheat into flour unprofitable. As a result, according to the senator's data, only 80 out of 250 milling enterprises across the country are currently active. The rest are either idle or operating at minimal capacity, incurring losses.

Central Asia Switches to Kazakh Grain
The problem is compounded by a shift in the trade strategy of Kazakhstan's traditional partners. Central Asian countries, particularly Uzbekistan and Tajikistan, which have historically been major buyers of Kazakh flour, now prefer to import cheaper, subsidized grain from Kazakhstan and process it at their own facilities.
This trend is directly reflected in customs statistics. As Olga Bulavkina reported, flour exports from Kazakhstan to Uzbekistan have plummeted threefold, from 1.3 million to 420,000 tons. Simultaneously, wheat grain supplies in the same direction have grown 4.5 times, increasing from 658,000 to 3 million tons.

Furthermore, some countries have begun to introduce protectionist measures against finished products from Kazakhstan. According to the senator, Tajikistan has imposed discriminatory tariffs on Kazakh flour of up to 18%, making its import economically unviable and further stimulating the purchase of raw materials.

A Call to Change Strategy: From Raw Materials to Deep Processing
In Senator Bulavkina's view, the current situation requires immediate intervention and a revision of the state's agricultural policy. She emphasized that the Ministry of Agriculture needs to develop a long-term system of strategic planning. This system should include accurate forecasting of domestic consumption and export potential, as well as constant monitoring of market conditions, prices, and yields, taking into account logistical risks and weather conditions.

The key recommendation is a paradigm shift: instead of stimulating raw material exports, the state should focus on supporting deep processing. Olga Bulavkina proposed introducing a system of incentives for exporters of finished products with high added value, such as pasta, starch, gluten, and other agro-industrial products. This would not only help restart idle enterprises but also create new jobs, increase tax revenues, and strengthen Kazakhstan's position on the world market as a supplier of quality finished goods, not just raw materials.