In response to the challenge of stabilizing prices for essential food items, the government of Kazakhstan has initiated several measures to ensure the availability and affordability of key commodities. Deputy Prime Minister Serik Zhumangarin led a meeting addressing the current situation, focusing on the manual control of regional prices for social foods.
The Trade Committee reported a slight increase in prices for socially significant goods in the first week of November, with a 0.1% overall rise. Seasonal factors, particularly a 1.7% increase in egg prices, were identified as the main driver. Conversely, there was a continued trend of reduction in prices for buckwheat (-0.2%) and sunflower oil (-0.1%). Notably, there was a seasonal decrease in vegetable prices, including potatoes (-1.7%), onions (-1.2%), cabbage (-1.3%), and carrots (-1%).
In response to the rise in egg prices, particularly in Almaty with a 3.7% increase, Deputy Prime Minister Zhumangarin instructed regional authorities to manually control the situation with social products. The Agency for the Protection and Development of Competition will analyze the causes of price increases for large manufacturers and report on the findings next week.
The Ministry of Agriculture assured that all necessary reserves for key commodities such as vegetables, sugar, and buckwheat are in place. However, there are concerns about contracting lags in some regions, with Almaty (94%), ZKO (64%), Karaganda (28%), Mangistau (61%), and SKA (74%) reporting varying degrees of delay.
To address this issue, Vice Minister of Agriculture Yerbol Taszhurekov announced plans to reformat forwarding agreements, emphasizing a shift to a purchase scheme of at least 70% directly between agricultural producers and processors. Only 30% should involve retail chains and wholesalers. So far, eight regions, excluding Almaty, the Atyrau region, and Shymkent, have already transitioned to direct contracts with agricultural producers. The Deputy Prime Minister has assigned the task of completing this restructuring within a week, emphasizing the need to provide significant support to poultry farms by ensuring sufficient working capital. This initiative aims to streamline the supply chain and ensure a more stable distribution of essential goods.
Furthermore, the government is actively investing in the construction of additional vegetable storage facilities. Azat Sultanov, Vice Minister of Agriculture, reported on the progress of the comprehensive plan for building storage facilities from 2023 to 2025. As of now, Kazakhstan hosts 901 storage facilities dedicated to vegetables and fruits, boasting a collective capacity of 1.8 mn tons. This includes 257 potato storage facilities capable of holding 499.700 tons, 580 vegetable storage units with a capacity of 1.1 mn tons, and 64 fruit storage facilities accommodating 136.900 tons. The plan includes the construction of 92 storage facilities with a total capacity of 689.900 tons, enhancing the overall storage capacity to 2.4 mn tons.
The meeting also addressed state support for sunflower cultivation. Out of the overall subsidies earmarked for supporting priority crop production in 2023, amounting to KZT 9.3bn ($19mn), KZT 2bn ($4,2mn) is designated for oilseeds. Deputy Prime Minister Zhumangarin stressed the importance of supporting the sunflower growing industry to prevent neighboring countries from taking advantage of Kazakhstan's resources.
The government is actively working to ensure food security, control prices, and support agricultural development, with a focus on enhancing storage capacities and encouraging the cultivation of priority crops like sunflower. The Food Corporation has been instructed to explore ways to assist farmers in selling non-marketable grain from the new harvest, further demonstrating the commitment to supporting the agricultural sector.
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