Kazakhstan's Ministry of Finance Proposes New Export Duties: Implications for Farmers

 

In late July, the Ministry of Finance of the Republic of Kazakhstan initiated the introduction of export duties on a wide range of agricultural raw materials, including an extensive list of grain crops such as wheat, rye, barley, oats, corn, rice, sorghum, buckwheat, millet, and soybeans. The proposed duty is set at $50 per ton with the aim of strengthening the country's budget.

 

It is worth noting that currently, the export of sunflower seeds is already subject to a duty that was introduced at the beginning of 2023. The rate was set at 20% of the value, but not less than 100 euros per ton, which led to a significant drop in prices on the domestic market and reduced the profitability of production. Producers and traders have expressed dissatisfaction with the size of the duty, suggesting its adjustment or complete abolition. At the time, the price of a ton of seeds was 240,000 tenge, which at the euro exchange rate equaled 100 euros. Today, a ton of sunflower seeds is offered at 150,000 tenge, and the euro rate has increased, making 20% of the cost of the seeds approximately 55 euros.

 

The Ministry of Finance's new proposals also include other oilseed crops, such as flax and rapeseed, for which a uniform export duty rate of $50 per ton is proposed. This proposal has been met with mixed reactions among the country's farmers: while the reduction in the duty on sunflower seeds could be beneficial for the industry, the inclusion of flax and rapeseed in the list of taxable products is not well-received.

 

Discussions on the introduction of duties continue at the government level, where agricultural associations are trying to convey to the authorities all the risks of such a decision. Specifically, there are concerns that administrative export restrictions might lead to economic problems, as stated by Deputy Prime Minister Serik Zhumangarin. Based on these discussions, a government interdepartmental commission involving the business community is expected to make a final decision.