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In Kazakhstan, some flour mills have temporarily suspended operations until the end of the summer because their production has become uncompetitive in external markets due to pressure from cheaper Russian flour. Moreover, even within the country, Kazakh flour is becoming uncompetitive. This was announced at a meeting of the agricultural sector council of the Pavlodar Chamber of Entrepreneurs, as reported in the press release of the NCE "Atameken".
"Out of all 15 mills in the Pavlodar region, only 7 are operational. The rest are all idle and will remain so until the new harvest, if there is one. They are operating at only 20-30%. First, they lack raw materials. Second, Russian flour depresses prices. It enters the market at 100 tenge, while the price of our first grade flour is 150," said Zhanar Serimova, chairman of the Pavlodar Regional Processing Association and director of TOO "Zhan-Dos KZ".
Processors are requesting permission to purchase grain by road transport, as transportation by rail takes a whole month, leading to an increase in flour prices.
According to Z. Serimova, starting from October 2023, the company completely stopped exports, which previously accounted for up to 70% of the total volume of produced flour.
"The situation with approximately 150 mills in Kazakhstan is similar. Only about 30 of them are operating at 30%. The warehouses of the rest of the mills are overflowing, and they cannot sell their goods. The entire export market is filled with Russian flour. In the domestic market, all bakeries use Russian flour, although its quality leaves much to be desired. Bakeries use it because of its low price," she emphasized.
She also added that when raw materials are imported into Uzbekistan or Kyrgyzstan, they are subject to a zero rate.
"But when these raw materials enter Kazakhstan, we pay 12%. And to get our flour to the markets of Uzbekistan or Kyrgyzstan, we pay 20%. At the moment, we are not competitive at any market. For instance, Kyrgyzstan is willing to buy our flour, but they have a fixed price for flour — 145 tenge. They receive raw materials from Russia or Kazakhstan duty-free. The Kyrgyzstan government has taken measures to prevent the processors from shutting down operations throughout the year," shared Z. Serimova.
