Kazakhstan’s flour exports set to plunge by 1 million tonnes as mills face closure

KAZAKHSTAN – Kazakhstan’s flour milling sector is experiencing a significant downturn, with flour exports projected to plummet from 1.5 million tonnes to 500,000 tonnes over the next five years.

This decline is attributed to the nation’s strategic pivot from flour to raw grain exports, a move that has already resulted in milling operations running at a mere 39% capacity and the closure of several mills .

​Zhomart Motyshev, head of the Grain Processors Union of Kazakhstan, voiced concerns during a recent parliamentary panel, highlighting that some milling enterprises are relocating to neighboring countries.

Motyshev expressed concerns that government subsidies favoring grain exports, particularly through routes like Turkmenistan to Iran, Afghanistan, Tajikistan, and Uzbekistan, are inadvertently encouraging these nations to develop their own milling industries.

This shift could render Kazakhstan’s domestic flour surplus obsolete, further exacerbating the challenges faced by local millers. He advocates for redirecting subsidies to bolster domestic enterprises and maintain the viability of Kazakhstan’s milling sector.​

Despite these challenges, Kazakhstan achieved a record-breaking grain harvest in 2024, producing 26.7 million tonnes, the highest in 13 years.

Of this, 3.057 million tonnes were processed into wheat and rye-wheat flour, matching the previous year’s output . However, the surplus in flour production, which is 2.5 times the domestic consumption, underscores the critical need for robust export markets.​

China has emerged as a promising market, doubling its imports of Kazakhstani flour to 15,100 tonnes in 2024, valued at US$3.4 million . Yet, overall flour exports have declined, with Afghanistan remaining the top consumer at 1.1 million tonnes, followed by Uzbekistan and Tajikistan.

The latter two have significantly reduced their flour imports, opting instead to import raw wheat and process it domestically, a trend facilitated by Kazakhstan’s grain export subsidies.​

Compounding the issue, Kazakhstan faces stiff competition from Russia, whose cheaper wheat has led to a 39% decline in Kazakhstan’s wheat exports over the first eight months of 2024.

This competition has pressured Kazakhstani producers to lower prices or risk losing traditional markets. In response, Kazakhstan has temporarily banned grain imports to protect its domestic market, but systemic challenges persist.​

To navigate these complexities, Motyshev emphasizes the necessity of strong governmental support to promote Kazakhstani flour in emerging markets, particularly China.

He warns that without strategic intervention, the nation’s milling industry could face further decline, leading to economic ramifications and the loss of a once-thriving sector.

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