Procurement of Sunflower: Food Corporation Ready to Increase Financing Volumes for Farmers

The national operator Food Corporation has announced its readiness to expand the volumes of forward financing for farmers engaged in sunflower cultivation. However, for scaling up the successful three-party procurement project, it is necessary to jointly resolve key issues with processors, particularly regarding price fixing and collateral obligations. 

This year, the forward procurement program for sunflower seeds has already demonstrated strong demand. According to the Food Corporation’s press service, contracts worth a total of 1.6 billion tenge were signed, ensuring the supply of 19.9 thousand tons of raw materials. The initiative involved 19 agricultural producers from four regions of Kazakhstan, establishing partnerships with key processing enterprises.

Among the project participants are major market players such as Ust-Kamenogorsk Oil Plant, Kostanay’s Prombaza 7 LLP, Akmola companies Blik Terminal LLP and Shortambai-2019 Plant, as well as Maslo-Del LLP from North Kazakhstan region. Such cooperation allows farmers to receive financing in spring, when it is most needed, and enables plants to guarantee themselves raw material supplies in autumn.
The need for expanding such support has become urgent. According to Yadykar Ibragimov, Chairman of the National Association of Oilseed Processors, the demand for sunflower remains consistently high both domestically and in export markets. He emphasized that sowing areas for oilseeds in Kostanay, North Kazakhstan, Akmola, Pavlodar and Abay regions were significantly expanded this year.

“Our market is experiencing a shortage of raw materials, and we can guarantee their full utilization,” Ibragimov said. “In the next two years, new plants with a total processing capacity of 1.5 million tons will be launched in the country.”

This creates huge potential for farmers but requires increased state financing and contracting. For its part, the Food Corporation confirms its readiness for dialogue. Chairman of the Board Asylkhan Dzhumashev noted that the national operator is open to cooperation and scaling up the program. However, he highlighted two main challenges requiring joint solutions.

“The first is the mechanism of price fixing during spring contracting. The second is the provision of collateral from the plants,” Dzhumashev explained. “If these issues are resolved jointly, the program will be able to grow significantly. We are open to proposals from agribusiness to make support mechanisms as effective as possible for all participants.”

Thus, the further development of this crucial support program for the agricultural sector depends on the ability of all parties – the Food Corporation, farmers, and processing plants – to find compromise solutions. Successful dialogue will not only increase financing volumes for farmers but also strengthen the raw material security of Kazakhstan’s dynamically developing oil and fat industry.