Smuggling of Russian grain to Kazakhstan will reach 2.5 million tons

The cost of wheat produced in Kazakhstan is much higher than in Russia. This provokes the flow of grain from the neighboring country and puts pressure on prices. And such trend will only grow.

"The cost of wheat production in Kazakhstan in 2021 was 100-105 thousand tenge per ton. The growth in the cost of all production components in 2022 (diesel fuel, plant protection products, fertilizers, wages) gives every reason to conclude that the cost of wheat grain in 2022 will only grow," the Union of Grain Processors of Kazakhstan said.

Higher yields, as well as systematic government support of the agricultural sector, help Russian farmers to get cheaper grain. In Kazakhstan, unfortunately, most of the farmers have no access to government support. While the rules of such support have been constantly changing. Moreover, the aridity of the climate is on the rise in grain-growing regions, which causes a drop in yields and an increase in the cost of crop production.

"The result of this is the unrestrained growth of grain imports from Russia to Kazakhstan. According to preliminary estimates, in 2021/2022 marketing year, Kazakhstan will import up to 3.5 million tons of wheat from Russia. While only about 1 million tons of grain will get to the country legally, with all taxes paid. The rest of the grain will be imported unofficially,” the Union of Grain Processors of Kazakhstan added.

Based on an estimate of 11.8 million tons of wheat yield in Kazakhstan in 2021, it is obvious that 3.5 million tons of cheaper Russian grain exercise a powerful impact on the market. This provokes a general drop in prices and prevents the country's farmers from getting a fair price for their products.
Source: eldala.kz