KAZAKHSTAN CONSOLIDATES ROLE AS WORLD’S LARGEST EXPORTER OF WHEAT FLOUR

Astana, January 25: Kazakhstan has been the world’s largest exporter of flour for the third consecutive year, with its share in the world market growing to 18 percent in 2009.

Export indicators in this industry have grown steadily. In the past nine years the exports has increased by twelve times. In 2007, Kazakhstan exported 1.5 million tons of flour. The number grew to 1.8 million in 2008. Last year the nation’s flour producers managed to export 2.2 million tons in 2009, the country’s Minister of Agriculture Akylbek Kurishbayev reported last week. Kazakhstan’s share in world exports of flour grew from 15 percent in 2007 to 18 percent now.

Kazakhstan has turned into a leading producer during the second half of the last century. This was due to the massive Virgin Lands campaign, when the Soviet government made large scale investments and brought a large workforce to turn pastures in northern half of Kazakhstan into a leading grain producing region of the USSR. Despite some negative effects on cattle breeding in the country, the Virgin Lands campaign secured Kazakhstan’s abundance of bread, which is a key element in the ration of people in Eurasia, and created an enormous export potential for the country.

Competitive advantages of Kazakh flour are obvious. It has high baking properties and lower price compared to its competitors. It is expected that with the establishment of the Customs Union and of the so-called “grain OPEC” with Russia and Belarus, the Kazakh exporters may further benefit from decreasing transportation costs.

Combined productive capacities of the country’s mills reach five million tons, while domestic consumption of flour reaches 1.7 million tons. Thus, there is still a significant potential for increasing exports. According to the plans in 2011, the country is capable of exporting up to three million tons of flour.

The share of flour exports as a product with high added value in total exports of grain has been increasing annually, and now stands at more than a half. About 80 percent of income from selling processed agricultural products in the country accounts for the export of flour.

Such high rates have become possible due to a record harvest. Last year, the initial weight of collected grain was 22.0 million tons, 4.7 million tons more than the previous year. Productivity reached 13.5 tons per hectare. It is the second record harvest in the last five years. In 2007, 22.3 million tons of grain was harvested in Kazakhstan.

The main consumers of Kazakh flour are CIS countries and Afghanistan. This year, Kazakhstan plans to expand its presence at global markets. There are projects to sell flour to India, China and Iran. The former two might play a particularly important role in the export structure as recent improvements in the diets in India and China favor growing consumption of products made of wheat flour.

There are also ambitious plans to radically increase export of pasta products to European and Asian markets. As of now, the Ministry of Agriculture envisages the sale of 30 tons of pasta in 2011. Starting this year, flour and pasta will be sold on foreign markets under the common brand of Kaznan (nan is Kazakh for bread).