Kazakhstan’s Vegetable Oil Export to China Jumps 300%
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Kazakhstan’s Oilseed planting acreage and production increased for several reasons since 2020. Producers have invested in using a more significant share of improved seeds, machinery, and other production technologies. Steady domestic demand for animal feed and edible oil has led to favorable prices for producers. Producers have also enjoyed promising export opportunities to China and other Central Asian countries, the European Union, and Iran. As a result, the sources noted Oilseed production increased from an estimated 2.5 million hectares in 2020 to 3.4 million hectares in 2022, yielding approximately 3.3 million metric tons (MMT). Several experts expect Oilseed production acreage to continue increasing, potentially reaching 5 million hectares by 2027, yielding 5 MMT.
Oilseeds and Oilseed processed products are now the fourth largest agricultural sector, following grain (primarily wheat and barley), dairy, and meat and poultry production. Specialists from the Ministries of Agriculture and Trade and Integration encouraged further expanding Oilseed production to reduce the country’s perceived reliance on wheat and barley trade. They suggested that, unlike wheat and barley, Oilseeds had more excellent export opportunities outside of Central Asia. They shared that the Government was considering increasing subsidies for Oilseed producers relative to wheat and barley producers, although no specific details were provided.
Kazakhstan utilizes just 40 percent of its Oilseed crushing capacity, while Russia utilizes 80 percent. There are 70 Oilseed crushing facilities in Kazakhstan that can process 3 MMT of Oilseeds annually. The most extensive oil-crushing facilities are in the Abai, Almaty, and East Kazakhstan regions. In order of volume, Kazakhstan processes sunflower, rapeseed, flax, and small amounts of soy.
Kazakhstan’s Vegetable Oil Export
Kazakh exports of edible oils to China increased more than 300 percent by value, or $58 to $170 million, between 2018 and 2022. By value in 2022, 63 percent, or $108 million, of edible oil exports to China consisted of sunflower oil, followed by rapeseed at $45 million and linseed at $17 million. Similarly, Oilseed exports by volume to China increased by nearly 300 percent, or 147,000 to 413,000 MT, from 2018 to 2022. In 2022, these exports comprised roughly 45 percent each of sunflower and flax, with safflower accounting for the other 10 percent.
Nearly all those presenting on trade mentioned China as the top growth export market for Kazakh edible oils and Oilseeds. China edged out the European Union to become the top destination for Kazakh Oilseeds by volume in 2022. To facilitate grain exports to China, the government announced the construction of a third port rail terminal at Bakhty-Tacheng to complement terminals at Dostyk-Alashankou and Altynkol.
Despite the expected increased production, national Oilseed processors were concerned about losing access to domestic Oilseeds due to increased exports to China and Central Asia. While Kazakh Oilseed processing operated at approximately 40 percent capacity, other Central Asian countries similarly were operating under capacity. For example, Kazakh National Oilseed Processors Association (NOPA) reported that in 2022, sunflower production in Central Asia (Kazakhstan, Uzbekistan, Kyrgyzstan, Tajikistan, and Turkmenistan) was estimated at 1.129 MMT. However, the processing capacity was estimated at 4.76 MMT.
However, Central Asia sunflower demand was estimated at 1.545 to 1.605 MMT, amounting to a 0.416 to 0.476 MMT deficit. While this references the sunflower seed market, it illustrates that production has not kept pace with demand and processing capacity. The Chairman of the Republican Chamber of Seed Growers noted Kazakhstan is highly dependent on planting seeds from outside the country and imports 80 to 85 percent of its planting seeds, mainly from Russia. Sunflower production increased as sunflowers were perceived to be more drought resistant than other Oilseeds.
Other sources: USDA
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