According to Evgeny Karabanov, head of the analytical committee of the Kazakhstan Grain Union, Kazakhstani farmers risk a drop in demand and a new financial crisis as Russia may send significant volumes of cheap grain to Central Asian countries, which have traditionally been key buyers of Kazakhstani wheat and flour.
According to the expert, who spoke on the Tenge Talks podcast on YouTube, Russia has large grain reserves that it cannot export to its traditional markets. As a result, Russian suppliers are seeking alternative markets, including Kazakhstan and other countries in the region.
For example, in Russia’s Rostov region, one ton of fourth-grade wheat costs approximately 6,000 rubles, or about 31,500 tenge ($68). By comparison, similar wheat in Kazakhstan costs around 85,000 to 90,000 tenge per ton ($184 to $195).
«The price difference is huge, and it continues to fall there. A huge amount of grain is not in demand because there is no way to export it,» Karabanov noted, referring to Russian grain.
Kazakhstan’s traditional markets under threat
Karabanov sees the main danger for Kazakhstani farmers not so much in direct imports of Russian grain into Kazakhstan, but in increased competition in foreign markets.
He pointed out that Uzbekistan, Tajikistan, Kyrgyzstan, Turkmenistan and Afghanistan are traditional destinations for Kazakhstani wheat and flour. Now, he said, cheaper Russian grain and flour are being shipped to these markets.
«If our traditional consumers focus on cheaper Russian grain, then there will be no demand for our grain,» Karabanov said.
In this scenario, Kazakhstani farms would either have to lower their prices or face difficulties selling their harvest. However, their ability to significantly reduce prices is limited by production costs.
According to Karabanov, the average cost of producing a ton of wheat in Kazakhstan is approximately 70,000 to 80,000 tenge ($151 to $173), excluding VAT. Therefore, a prolonged decline in market prices could force some farms to sell their harvest at a loss.
A matter of survival for farmers
Karabanov believes the issue is no longer about farmers potentially earning windfall profits, but about maintaining their financial stability.
Many are still recovering from a difficult 2023, when crops were first damaged by drought and then hit by heavy rains during the harvest. At the time, part of the crop was downgraded to feed grain, while prices fell below 50,000 tenge ($108) per ton.
Over the following two years, according to Karabanov, many farms have been dealing with financial shortfalls and paying off debts. A new price shock could put them in a difficult position once again. If farmers are unable to sell the current harvest at an acceptable price, they could face a shortage of working capital by the next planting season.
Pressure from Russian wheat could increase further
Meanwhile, Russian grain supplies may not yet have reached their peak. As Karabanov noted, the main harvesting campaigns in Siberia, Altai and the Urals have not yet begun. Currently, supplies are coming primarily from southern Russia, the Volga and Orenburg regions, Tatarstan and Bashkortostan.
Once grain from Russia’s eastern regions enters the market, supply could increase even further.
Karabanov described the current situation as a «worst-case scenario» for Kazakhstan’s grain market. He believes the Kazakhstani government may need to take unconventional measures to support domestic producers.
However, some import restrictions are already in place. As Karabanov noted, Kazakhstan has restricted wheat imports since July 27. A complete ban applies to imports by road and water, while rail shipments are permitted only for domestic processors and poultry farms. These measures, however, do not address competition between Russian and Kazakhstani grain in third-country markets.
