Shortage of sugar threatens food industry in Kazakhstan
More than 15,000 Kazakhstanis, who work in the non-alcohol beverage industry may lose their jobs because of the shortage of sugar in the country, according to the association.
Now the organization is trying to catch the attention of the government to the risks that the entire industry currently faces. Many Kazakhstani sugar producers can’t keep up with the demand. They sell sugar by limited parties and only to those who have made a full payment while many beverage producers struggle with a lack of liquidity. At the same time, sugar prices are going up. For example, over the past several weeks, the sugar price in Kazakhstan increased from $0.90 per kilogram to $1.04.
According to Aliya Mamytbekova, president of the Association of Non-Alcoholic Beverage Producers, the government is failing to take urgent measures to support the industry. This is not acceptable during the peak season which starts in May and lasts until September. During this period food companies must replenish stocks of raw materials for beverages including sugar. If they fail to do so, they may face disruption in the production cycle and will be forced to cut jobs.
On March 14, 2022, Russia imposed a ban on exports of sugar out of the country. At the same time, Kazakhstan does not produce enough sugar (the industry consumes 582,000 tons of sugar per year). Moreover, it doesn’t meet the quality requirements.
As Mamytbayeva noted, the non-alcoholic beverage industry needs a special sort of sugar called «extra» which Kazakhstan does not produce on an industrial scale. Sales of another popular sort of sugar TS-2 are limited while beverage producers desperately need it to keep up the production process.
When Russia announced its intention to prevent sugar from being exported abroad, Kazakhstanis found themselves amid the sugar rush. As a result, shops reported a shortage of the product and its price went up.
In response to the situation Erbol Karashukeev, former minister of agriculture, promised to increase the sugar production sevenfold through more harvesting and modernization of sugar production sites.