Kazakh Grain Exports Go Beyond Central Asia?
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Kazakhstan, located in the hinterland of Central Asia, is the world’s largest food producer and exporter. According to FAO, Kazakhstan’s total Grain output in 2018 was 20.04 million tons, ranking 28th in the world; total Grain export was 8.53 million tons, ranking 13th in the world. The “2019 Global Food Security Index Report” shows that Kazakhstan’s food security level ranks 48th among 113 countries worldwide.
According to UN Comtrade Database, Kazakhstan’s total Grain export volume reached 1.304 billion USD in 2018, with an increase of 57.6% over 2017. Among them, Wheat was the most critical Grain export product, with an export value of 972 million USD, accounting for 74.5% of Kazakhstan’s total food export; the export value of Barley was 294 million USD, accounting for 22.6%; the export value of rice was 26 million USD, accounting for 2.01%. The export volume of these three significant categories of Grain crop products accounted for 99.1%
From the perspective of spatial pattern, the Grain export market presented the regionally concentrated geographic patterns of “Central Asia as the main area, radiating all around.” Meanwhile, Uzbekistan, Tajikistan, China, and Iran were important trading partners. In 2018, the main destinations of Kazakhstan’s Wheat exports were Uzbekistan, Tajikistan, China, Italy, Afghanistan, and Turkey, which accounted for 73.6% of Kazakhstan’s total Wheat export volume together.
According to the research paper “Potential of Kazakhstan’s Grain export trade,” the primary export market for Barley was concentrated in Iran, and a small part was exported to Russia, Germany, the United Kingdom, and other western developed countries. In 2018, Kazakhstan exported 272.4 million USD of Barley to Iran, accounting for 92.8%; 120 million USD of Barley was exported to Uzbekistan, accounting for 4%; Asian countries accounted for 99.5% of Kazakhstan’s total Barley export volume together.
It is considered by the Food and Agriculture Organization of the United Nations and the European Bank for Reconstruction and Development to be one of the only four countries in the world whose food production capacity is underutilized and can have a significant impact on meeting global food demand. However, an adjustment in agricultural policy due to changes in the market system has led to a substantial decrease in the total amount of agricultural land used in Kazakhstan, with a 35% reduction in the area of arable land since independence in 1992.
The decrease in the area of arable land, instability of Grain trade development, the extensive growth of Grain trade, and the low contribution to the development of the agricultural industry affect the optimization of Grain trade structure and the development of Grain trade potential in Kazakhstan. At the same time, the high inland transportation cost also led to a relatively single market for Grain exports, which weakened Kazakhstan’s competitiveness in international trade.
Also, factors such as agricultural policies, damaged infrastructure, insufficient storage capacity, and the use of fertilizers have also significantly impacted Kazakhstan’s Grain production. In addition, factors such as food supply capacity, per capita income difference, labor force quantity, trade facilitation degree, and foreign trade policy have also affected Grain trade expansion in Kazakhstan to a certain extent.
Kazakhstan Grain Optimization
The research paper concludes that Kazakhstan should make use of comparative advantages to optimize the structure of Grain trade in bilateral trade. Conversely, Kazakhstan should increase the exports of Grain varieties with a strong competitive advantage in Kazakhstan, such as Wheat, Barley, and buckwheat. On the other hand, Kazakhstan should receive foreign technological investments in Grain crops such as maize, rice, and rye.
More research and development on production technologies could help Kazakhstan improve its food production efficiency, for instance, enriching seed cultivation, promoting the technology for disease and pest control, and improving the agricultural irrigation system. Investment in the construction of international transportation, logistics infrastructure, and information network infrastructure should be increased.
Other sources: FAO
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