Russia may send significant volumes of cheap grain to Central Asian countries, which are traditionally key buyers of Kazakh wheat and flour. If consumers switch to Russian products, Kazakh farmers risk facing a drop in demand and a new financial crisis. This was reported by Qazaqyia.kz citing Kursiv Media.
This was stated by Yevgeny Karabanov, head of the analytical committee of the Grain Union of Kazakhstan, on the Tenge Talks YouTube channel.
According to him, the problem is related to the large volume of Russian grain that is currently difficult to export to traditional foreign markets. As a result, Russian suppliers are looking for alternative sales destinations, including Kazakhstan and other countries in the region.
Karabanov cited the Rostov region as an example, calling it one of Russia's main grain export centers. According to him, fourth-class wheat directly from farms there is offered at about 6,000 rubles per ton, or about 31,500 tenge. For comparison, similar wheat in Kazakhstan costs about 85-90 thousand tenge per ton.
"Look at the difference. And it continues to get cheaper. A huge amount of grain is not in demand because there is no way to export it," Karabanov noted.
The expert sees a particular danger for Kazakh farmers not so much in the direct import of Russian grain into Kazakhstan, but in competition for foreign markets.
Karabanov recalled that Uzbekistan, Tajikistan, Kyrgyzstan and Turkmenistan are traditional destinations for Kazakh wheat and flour. Afghanistan is also among them. Now, according to him, cheaper Russian grain and flour are being directed to these same markets.
"If our traditional consumers are focused on cheaper Russian grain, then there will be no demand for our grain," Karabanov said.
In this case, Kazakh farms will either have to lower prices or face problems selling their harvest. At the same time, opportunities for significant price reductions are limited by production costs.
According to Karabanov, the average cost of a ton of wheat in Kazakhstan is about 70-80 thousand tenge excluding VAT. Therefore, a prolonged decline in market prices could lead to some farms being forced to sell their harvest at a loss.
Karabanov believes that the issue is no longer about possible excess profits for farmers, but about the financial stability of farms.
Farmers are still recovering from the difficult year of 2023, when crops first suffered from drought, and then rains began during the harvest campaign. Some wheat sprouted in the field and moved into the feed category, and prices during that period fell below 50 thousand tenge per ton.
In the following two years, according to the expert, many farms closed financial gaps and debts. A new price shock could put them in a difficult position again. If farmers cannot sell the current harvest at an acceptable price, they may face a shortage of working capital by the next sowing campaign.
"Here we are not talking about excess profits that farmers can get, but for many, it is about survival," Karabanov stressed.
At the same time, the current supply of Russian grain may not be maximal. As the expert noted, the mass harvest campaign in Siberia, Altai and the Urals has not yet begun. Currently, offers come mainly from southern Russia, the Volga region, Orenburg region, Tatarstan and Bashkortostan.
After grain from eastern Russian regions enters the market, supply may increase even more.
Karabanov called what is happening the "worst-case scenario" for the Kazakh grain market. In his opinion, in the current situation, the Kazakh government may need non-standard measures to support domestic producers.
At the same time, certain import restrictions are already in place. As the expert noted, since July 27, Kazakhstan has restricted wheat imports from other countries: a complete ban is in effect for road and water transport, while rail supplies are allowed only for domestic processors and poultry farms. However, these measures do not solve the problem of competition between Russian and Kazakh grain in third-country markets.
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