Miller Magazine Issue: 125 May 2020

Kazakhstan 100 MILLER / MAY 2020 er of wheat flour, particularly to Afghanistan. However, Kazakhstan’s milling industry has complained that this trade has declined somewhat as Uzbekistan has milled more Kazakhstani wheat for re-export. BARLEY Barley production is estimated at 3.9 MMT, relative- ly flat from MY 2019/20’s production of 3.8 MMT, as higher expected yields compensate for area reductions. USDA Foreign Agricultural Service (FAS) expects bar- ley exports to rebound slightly in MY 2020/21 to 1.8 MMT, given higher available supplies. Unlike wheat and some other grains, barley is not currently subject to any export restrictions in Kazakhstan or the Eurasian Economic Union. Iran contin- ues to be the biggest import- er of Kazakh barley, taking 89 percent of all exports during MY 2018/19. Newcomers to barley exports from Kazakh- stan in 2019 include China and Azerbaijan, but it is not yet clear whether they will become regular buyers. EXPORT QUOTAS FOR WHEAT AND FLOUR As a response to the COVID-19 pandemic, Ka- zakhstan announced a state of emergency in the country starting from March 16, 2020. And in late March 2020, Ka- zakh government implement- ed a number of temporary export restrictions on staple food. In particular, wheat and wheat flour are subject to ex- port quotas, while buckwheat and many vegetables and oilseed products are prohib- ited for export while Kazakhstan remains under an emergency situation related to COVID-19. The Ministry of Agriculture has indicated that restrictions will likely remain in place until September 1, 2020. The Ka- zakh government has stated that the re- strictions are intended to ensure adequate supply of staples for the domestic market and to stabilize the economy during the current state of emergency. Kazakhstan initially planned to ban all flour exports, while not limiting wheat grain exports. However, this was revised to the current quota system due to con- cerns by the Kazakh milling industry. For April 2020, the quota for flour was set at 70,000 metric tons, while the wheat grain quota was set at 200,000 MT. For May, the Ministry of Agriculture increased the quota for flour to 150,000 MT and for wheat to 257,000 MT. Quota recip- ients will be required to sell 30 percent of the volume of their export quota on the domestic market at fixed pric- es. Quota applications must be submitted through the relevant producer’s groups, such as the Grain Union of Kazakhstan, Millers’ Union, and Potato Union of Kazakh- stan. Quota volume for specific exporters is determined by taking the total quota set by the Ministry of Agri- culture’s Crop Department, multiplied by the exporter’s percentage share of total export volume. NUMBER OF THE MILLS DECREASED Millers are concerned about the wheat flour restrictions. In 2018, there were 350 ac- tive mills, but in 2019 this number decreased to 260. Average wheat flour exports were previously around 2.8 million tons, but last year ex- ports reached just 1.4 million tons. This reduction was due in part to increased milling of Kazakh wheat in Uzbekistan, which drew calls from Kazakh millers to limit wheat grain ex- ports in 2019. Currently, millers claim that export restrictions will create an excess supply of both grain and flour, and that increased demand for food in other countries amid the spread of COVID-19 could have helped the companies recapture losses incurred last autumn and al- lowed mills to stay afloat. Wheat Production, Consumption and Export in Kazakhstan (1000 Tons) 2018/19 2019/20 2020/21 Production 13947 11452 13500 Consumption 6600 6400 6400 Exports 8296 6000 6700 Source: USDA Barley Production, Consumption and Export in Kazakhstan (1000 Tons) 2018/19 2019/20 2020/21 Production 3971 3830 3900 Consumption 2150 2200 2200 Exports 1820 1700 1800 Source: USDA Wheat Production, Consumption and Export in Kazakhstan (1000 Tons) 2018/19 2019/20 2020/21 Production 13947 11452 13500 Consumption 6600 6400 6400 Exports 8296 6000 6700 Source: USDA Barley Production, Consumption and Export in Kazakhstan (1000 Tons) 2018/19 2019/20 2020/21 Production 3971 3830 3900 Consumption 2150 2200 2200 Exports 1820 1700 1800 Source: USDA