Sugar сrisis in Kazakhstan is coming to its end

Kazakhstan’s Ministry of Trade has figured out how to stop sugar prices from further increasing. According to Serik Zhumangarin, the trade minister, the government is going to provide domestic sugar plants with a three-month stockpile of sugar cane from Brazil. The plants have promised that they won’t raise the sugar price.

The minister said that there are four sugar plants in Kazakhstan with a combined capacity of 700,000 tons of sugar per year. Given that Kazakhstan needs just 520,000 tons, the remaining sugar might be exported abroad, the ministry believes, even though this would be hard due to high global competition in this market.

The demand for sugar from regular Kazakhstanis is even smaller, just about 230,000 tons. About the same amount of sugar is needed for the country’s juice industry and about 80,000 tons for candy companies.

Zhumangarin has already met with representatives of those four sugar plants. «We are going to allocate enough funds to them to purchase three-month stockpiles of Brazilian sugar cane. This means that the plants will have enough raw materials for the entire year. Moreover, they guarantee that the sugar price won’t rise. The price will be at $0.97 per kilogram all over Kazakhstan,» he said.

On September 1, Kazakhstan’s Bureau of National Statistics announced that food prices in Kazakhstan went up by 20.8% on year on year basis on average. The sugar price rose by 92.8% though.

The shortages of sugar caused staff changes in the country’s government. The sugar issue was the main reason why President Kassym-Jomart Tokayev removed Bakhyt Sultanov from office and appointed Serik Zhumangarin new trade minister. The former chairman of the Anti-Monopoly Agency has promised to find a solution to the sugar issue. The president called this dependence on foreign supplies of sugar a serious miscalculation of the government, which he blasted.

The deficit of sugar in Kazakhstan began in March after the Russian invasion of Ukraine. According to Erbol Karashukeev, minister of agriculture the geopolitical tensions have severely hit the country’s logistics. As a result, the transportation of sugar from abroad is now ten times slower.