ASTANA, KAZAKHSTAN — Kazakhstan’s wheat production is expected to rebound in 2024-25 as higher soil moisture raises yield while the government has extended by six months import restrictions on wheat. 

The initial ban was enacted in October 2023 for six months to prevent “gray schemes” to import cheap wheat from border regions of Russia for re-exporting. The April extension pushes the ban to mid-October, with certain exceptions.

Wheat is the nation’s largest crop by acreage, accounting for 80% of grain production. Production in 2024-25 is estimated at 15.8 million tonnes, according to a report from the Foreign Agricultural Service (FAS) of the US Department of Agriculture. A combination of drought and excessive rains resulted in a 26% drop in production in 2023-24 from the previous season to 12.1 million tonnes. Yields also were down 28% per hectare.

In addition to wheat, Kazakhstan produces barley, cotton, sunflower seed and rice. 

Wheat and wheat flour exports in 2023-24 were estimated at 10 million tonnes, but exports are expected to increase in 2024-25 to 11.1 million tonnes, according to the FAS. Kazakhstan is the region’s largest flour exporter by volume, shipping mostly to other Central Asian countries and Afghanistan. 

However, it is looking to continue to expand its trade with China and has increased crop exports from 750,000 tonnes in 2019 to 3.5 million tonnes in 2023. 

Agriculture is a key part of Kazakhstan’s economic, social and environmental development, according to the World Bank, and is Central Asia’s largest grain producer and the only significant exporter. It also has significant agriculture potential with the world’s fifth largest endowment of agricultural land with 25 million hectares of arable land and more than 70 million hectares of pastureland. 

It has sufficient water resources, a relatively clean production base to generate high-quality products, proximity to large markets and growing investment in transport and trade corridors, the World Bank said.  

The government is looking to take advantage of the sector’s untapped potential for exports, jobs and inclusive and sustainable growth, the World Bank said. However, critical investments and transformations are needed in the public and private sectors. 

It developed a national agricultural sector development project plan for 2021-25 for increasing competitiveness by improving labor efficiency, doubling agricultural exports, domestically producing key food products and increasing rural incomes. Plans to increase labor efficiency include subsidies to agricultural producers to purchase equipment, increasing land area under irrigation, increasing the average cattle weight, increasing the use of high-quality seeds, fertilizers and pesticides and introducing agricultural research and development to producers. 

Crop production

Wheat harvested area for 2024-25 is estimated at 13.2 million hectares with production of 15.8 million tonnes. Farmers said the current soil moisture content helps the outlook for winter wheat with extensive rains last fall and above average snow in the winter, the FAS said. 

Surface soil moisture and subsurface soil moisture in the northern grain producing regions was reported as higher in April compared to the same time as last year, according to USDA Crop Explorer data. 

West and North Kazakhstan were impacted by heavy flooding, leading to loss of livestock. Grain producers said flooding had less of an impact on row crops because most wheat fields are protected by dikes. 

“The floods did damage some grain storage facilities and other infrastructure,” the FAS said.

Due to a potential shortage of seeds due to flooding, the semi-government owned Food Contracting Corp. will provide seeds on installment payment terms. 

Farmers impacted by flooding damage also will be eligible for government-backed loans with up to a 24-month repayment period. 

Consumption in 2024-25 is estimated at 4.7 million tonnes, about 250,000 tonnes less than 2023-24, the FAS said. 

“Wheat consumption is expected to fall as quality improves this year and exports increase,” it said. 

Barley production in 2024-25 is estimated at 3.25 million tonnes, an increase from 2.6 million tonnes last season, due to a higher yield outlook of 1.3 tonnes per hectare. Consumption, which is mainly for animal feed, is estimated at 1.8 million tonnes. 

“Many barley farmers have reported their intentions to continue planting it in the upcoming season as there is strong demand from the domestic feeding industry,” the FAS said. “However, barley planting intentions could be challenged by a shortage of available barley seeds on the market.”

Kazakhstan also has seen its oilseed production increase in the last several years, from 2.5 million hectares in 2020 to 3.4 million hectares in 2022. Production is expected to reach 5 million hectares by 2027 on the increased use of modern production methods, favorable domestic prices and strong export demand from China. 

However, the sector faces challenges in inaccurate market statistics, inconsistent government policies and challenging transportation logistics, the FAS said. 

Flour production, exports

Flour milling enterprises in the country have been privately owned since 1991. By the end of the 1990s, there were 1,000 flour mills. Consolidation through the years has brought that down to 270 enterprises with a total production capacity of 9.3 million tonnes per year, according to the Ministry of Agriculture. 

Following a three-year slump, the nation produced a record 3.4 million tonnes (wheat equivalent) of flour in 2022. Production dipped slightly in 2023 to 3.05 million tonnes. 

So far in 2024, production has been down, hitting a seven-month low this January of 237,100 tonnes, according to APK-Inform. Production volumes were also nearly 9% lower than December’s volumes and 3% lower year-over-year. 

Wheat and wheat flour trade are a critical part of Kazakhstan’s agriculture sector. 

Wheat imports in 2024-25 are estimated at 2 million tonnes as demand for Russian wheat from local mills and poultry farms is expected to continue, the FAS said. Exceptions to Kazakhstan’s import restrictions are granted for railway deliveries to flour mills and poultry enterprises for their own production and consumption. Imported wheat cannot be sold on the domestic or foreign markets. 

Kazakhstan will be the second largest flour exporter in 2024-25 at an estimated 2.5 million tonnes (wheat equivalent), according to the International Grains Council. In 2023-24, from September to February, Kazakhstan exported 4.1 million tonnes of wheat and wheat flour, a drop of 20% from the same period a year earlier. Uzbekistan, Afghanistan and Tajikistan are the top three buyers. 

Exports to Uzbekistan were 1.8 million tonnes, a drop of 18%, while Afghanistan imported 889,000 tonnes, a drop of 36%. Tajikistan imported 5% less at 615,000 tonnes. 

China partnership

Meanwhile, wheat and wheat flour exports to China have increased seven-fold from September to February in the 2023-24 market year, the FAS said. Total exports to China in 2023 reached 3.5 million tonnes, compared to 750,000 tonnes in 2019. 

Traders said the increase is attributable to Chinese buyers’ interest in importing feed quality wheat, the FAS said. 

China also has become the top destination for Kazakhstan’s barley exports at 723,000 tonnes in 2023-24. That was a nearly four-fold increase from last year, the FAS said. 

“This increase is attributable to strong demand for animal feed and comparatively favorable pricing of Kazakhstani barley to China versus other origins,” it said. 

Kazakhstan’s government sees China as a critical trade partner and is working to build relations with its eastern neighbor. In February, China lifted meat export restrictions on foot-and-mouth disease, allowing Kazakhstan to resume exports of livestock products to China.

This June, the first Kazakh-Chinese grain forum is planned in the Xinjiang Uyghur Autonomous region of China. Kazakh officials said the forum will be a significant step toward strengthening cooperation in the supply of grain with attendees from businesses, government agencies and state-owned companies involved in regulating the export/import of grain and processed products.