Kazakhstan Strengthens Its Position Amid Global Challenges in the Grain Industry

The global grain market is undergoing transformation: export volumes are declining, logistics are becoming more complex, and competition among key players is intensifying. Trade disputes between the US and China, armed conflicts, logistical issues in Ukraine, and subsidized pressure from Russia are shaping a new reality in which Kazakhstan must swiftly adapt.

Kazakhstan: Growth, Constraints, and the Search for New Solutions
Despite external challenges, Kazakhstan is demonstrating positive momentum. By the end of 2024, the country exported 7.9 million tons of grain. From September to March alone, 6.4 million tons were shipped. The main destinations were Uzbekistan (+31.7%), Tajikistan (+50%), and Kyrgyzstan (+88%).

Expansion into southern markets is particularly noteworthy. Exports to Iran grew 17.6 times, reaching 761 thousand tons, and exports to Azerbaijan increased 84 times to 423 thousand tons. This growth was supported by state subsidies for transportation costs: up to 30,000 tenge per ton for distant countries and 20,000 tenge for closer markets.
However, access to European markets remains limited. According to representatives of the agricultural sector, high transit tariffs through Russian territory reduce the competitiveness of Kazakh grain, effectively halting exports to the EU.

Domestically, the need to revise the system of forward contracts is being actively discussed. Currently, farmers who receive an advance from the Food Corporation are obliged to deliver the entire harvest at a fixed price. This limits their ability to respond to market conditions and reduces financial flexibility. Parliament has proposed an alternative model: allowing farmers to keep part of the crop for free market sale and repay the advance in cash, as practiced in the US in the 1990s.

At the same time, demand for Kazakh grain remains consistently high. It is used both in its pure form and as an additive to enhance the quality of other countries’ grain. To further strengthen its global position, analysts recommend focusing on reducing production costs, increasing subsidies, and restraining railway tariffs.

🔑 Key Takeaways:
🔹 Record export pace: 7.9 million tons of grain in 2024. 6.4 million tons from September to March.
🔹 Exports to Iran grew 17-fold, to Azerbaijan — 84-fold.
🔹 Farmers call for more flexibility: forward contract system under review, with proposals to allow partial market sales.