Kazakhstan Bans Wheat Import From Russia by Road


Apr 19, 2023 | Agricultural Markets News

Reading time: 2 minutes

The order of the Minister of Agriculture, “On the introduction of a ban on the import of Wheat into the territory of the Republic of Kazakhstan by road,” officially came into force on 10 April. The document states that “To introduce a ban for six months on the import of Wheat (commodity nomenclature code of foreign economic activity of the Eurasian Economic Union: 100119; 100199) to the territory of the Republic of Kazakhstan by road from third countries and the countries of the Eurasian Economic Union”. The order was agreed by the Ministries of Finance, Trade, and National Economy.

The ban on Wheat imports was introduced at the suggestion of market participants – farmers, traders, and millers – because most of the Russian Wheat supplies to Kazakhstan are smuggled without VAT. Imported Grain is legalized through peasant farms and re-exported to Central Asia, reducing prices for legal Kazakh Wheat. According to the data announced at the Eurasian Agricom conference on March 15-16, the current marketing year’s total volume of deliveries from Russia has already exceeded 2 million tons. 

This decision is criticized by small Grain processors, who believe that it will put them in unequal conditions with large enterprises, since they do not have the opportunity to import Grain by rail. According to the Union of Grain Processors of Kazakhstan, the Republic annually loses about $500 million due to the smuggling of Russian Wheat. Experts estimate the volume of annual illegal imports of Russian Wheat to Kazakhstan at 1.5-2 million tons.

In half of the current season, the total Wheat import from Russia to Kazakhstan reached 2.5 million tons. According to the Grain Union, about 50% of this volume falls on illegal supplies. However, according to the chairman of the board of founders of the Union of Grain Processors of Kazakhstan, Yevgeny Gan, the ban on the import of Grain from the Russian Federation by road will not solve the systemic problems of the industry.

Kazakhstan and Uzbekistan: Deep Grain Processing Cluster

Kazakhstan and Uzbekistan have updated the roadmap for implementing investment agreements and trade contracts. The document provides for the creation of a cluster for deep processing of Kazakh Grain of up to 1 million tons and the implementation of a project for refining vegetable oil on the territory of the International Center for Industrial Cooperation (ICPC) “Central Asia” being created. This was reported by the press service of the Ministry of Trade and Integration of the Republic of Kazakhstan.

The updated Roadmap was agreed upon on March 2 in Shymkent by the Deputy Prime Ministers of the two countries, Serik Zhumangarin and Jamshid Khodjaev. The parties also agreed to work out the opening of branches of the Tashkent Institute of Irrigation and Agricultural Mechanization Engineers based on the Kazakh National Agrarian Research University and the M.Auezov South Kazakhstan University in Chirchik.

In addition, the vice premiers of the two countries signed a protocol defining the ICPC “Central Asia” construction site.” The center will be located in the area of international (multilateral) checkpoints “Atameken” (RK) – “Gulistan” (RU). Now the parties will work out the allocation and reservation of land plots in 50 hectares from each for the construction of the MCPC.

The Kazakh and Uzbek trade departments, as curators of the project, agreed within a month to coordinate the issues of extending the “green” corridor for the movement of goods and cargo produced on the territory of the ICPC, as well as to determine the benefits and preferences operating on the territory of the ICPC on a parity basis.

Other sources: GRAIN UNION

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