June 2020 Highlights of Kazakhstan Agricultural Sector

According to the updated June report of the International Grain Council, wheat production in Kazakhstan in the next season will increase to 12.9 million tons. In comparison with the current MY, the growth will amount to 1.4 million tons. Last season, local farmers harvested 13.9 million tons of grain from their fields.

The initial grain reserves of this type in the republic in 2020-21, according to the latest data, will decrease by 0.6 million tons against reserves at the beginning of this season to 1.2 million tons. In May, an expert estimate was 0.4 million tons more optimistic. Meanwhile, last year’s figure was 2.9 million tons.

The supply of agricultural crops in Kazakhstan in the coming season, by contrast, will increase to 14.2 million tons. Previously, the forecast was higher by 0.4 million tons. In 2019-2020, this indicator is estimated to be lower by 0.4 million tons. In 2018-19 MY, the wheat supply amounted to 16.9 million tons.

Crop export in 2020-21 MY is projected at 7.5 million tons. Previously, the prospects were appropriate. This season, deliveries abroad are estimated at 1 million tons more modest.

Last season, 8.8 million tons of wheat were exported. Imports of grain of this type in Kazakhstan in the forecast period will be reduced to 0.1 million tons. This year, Kazakhstan will purchase abroad 0.5 million tons of wheat. In the 2018-19 season, the volume of imported agricultural crops was also very modest, 0.1 million tons.

The volume of wheat use in the country in 2020-21, according to the June IGC data, will decrease by 0.5 million tons compared to this season to 5.6 million tons. Previously, the forecast was higher by 0.2 million tons. In the past MY, grain consumption of this type was 0.7 million tons more.

Carrying stocks of wheat in the next season will decrease to 1.1 million tons. The previous report promised slightly higher reserves at 1.3 million tons. This year, this indicator is expected to reach 1.2 million tons. Last year’s reserves in the republic amounted to 1.8 million tons, Kazakh Zerno reported.

KazAgro invests more than 64 billion tenge in projects last year

During the reporting meeting, the Minister of Agriculture announced that last year, with the help of the KazAgro holding, 374,000 heads of small cattle were purchased and 82,000 heads of cattle were brought into the country.

The holding allocated money for the purchase and import of livestock 12.3 billion tenge and 53 billion tenge, respectively. The company spent 19.1 billion tenge to finance 16 new projects.

In total, over the past year, 54 investment projects in the field of livestock were funded for a total of 64.3 billion tenge. This year, KazAgro plans to finance the purchase of 100,000 head of cattle and 300,000 head of small cattle. The company will also provide financial support for new projects that are involved in the production of dairy products and poultry, Kazakh Zerno reported.

Kazakhstan pins hopes on foreign investors for agro-industrial development

Kazakhstan has an immense potential to diversify and develop its economy through the agro industrial complex. The nation’s vast agricultural resources can produce goods meeting the needs of both its population and foreign countries. Its strategic location grants it access to a combined market of more than 500 million people.

The investment opportunities in the agroindustrial business in Kazakhstan were one of the key topics during the June 17 webinar for investors from Kuwait hosted by Kazakh Invest, which provides legal consultancy and support to all investors interested in working in Kazakhstan.

Kazakhstan is the world’s ninth-largest country with more than 210 million hectares of arable land and nearly 20 percent of the population employed in agriculture. “Agriculture remains the flagship of Kazakhstan’s economy which boasts vast swaths of arable land as well as direct access to major trading partners – China and Russia.

Kazakhstan has the potential to play an important role in addressing the challenges of global food security,” said Diana Ablyakimova, the webinar moderator and a senior manager at Kazakh Invest national company.

The most promising agribusiness projects are in the production and processing of oilseeds, meat, poultry, fish and vegetables. Kazakh Invest proposes projects worth anywhere from $12 million to $114 million for the construction of flax oil, sunflower oil, vegetable oils, and soybean processing plants.

A screenshot of a slide with Kazakh Invest’s project proposals in agribusiness from the the June 17 webinar for Kuwait investors.

Demand for flax

There is a great demand in Europe for flax seeds grown in Kazakhstan, which made the country a leading flax seed producer over the last few years.

“Now they (Kazakh government) are ready to invest in the next stage – the conversion of flax seeds to vegetable oil. But they need expertise in processing, an understanding of the flaxseed oil market because this is an export product, additional sources of financing to make the project competitive. Now we are looking for foreign investors,” Madi Kanafin told The Astana Times.

In addition to this, the Kazakh government supports agricultural entrepreneurship in “developing new agricultural technologies, subsidizing the cost of fertilizers, and building irrigation,” he said.

The government also exempts investors from corporate income tax and land taxes for up to 10 years, as well as from property tax for up to eight years. The investment priority projects will receive a 25 percent standard rate of investment subsidy. Kazakh Invest is looking for “foreign investors who can share industry best practices in the field of agricultural science,” he said.

According to Kanafin, Dutch investors and agronomists have been working with local farmers in a potato processing project during the last two years. The project uses Dutch experience, standards, and technologies to get high yields of more than 100 tons per hectare, he said.

Kazakh Invest operates based on the one window principle, where they clarify local laws and procedures, provide transparency on decision-making, and reduce the administrative burden, according to Astana Times.

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