Kazakhstan is taking radical steps to protect domestic prices and support local agricultural producers amid record harvests in recent years.
The Interdepartmental Commission (IDC) has decided to impose a complete ban on wheat imports by road and rail.
Although the official protocol had not yet been made publicly available at the time of publication, representatives of industry associations and independent experts have already confirmed the restrictions have been agreed upon.
For Russian exporters, especially in border regions, this step will pose a serious challenge.
Exception Lists: Who Will Maintain Access to Raw Materials?
The initial draft of the decision proposed a total ban on grain imports without any concessions for businesses.
However, the Union of Grain Processors of Kazakhstan succeeded in advocating for a compromise. Shipments will be permitted exclusively by rail and strictly according to special lists.
The list of those who will be able to continue purchasing foreign raw materials includes:
Kazakhstani millers – it is critical for processors to maintain production stability.
Poultry enterprises – to secure feed supplies.
Large grain elevators – according to individually approved departmental lists.
Price Pressure on Russian Regions
Dmitry Rylko, Director General of the Institute for Agricultural Market Studies (IKAR), believes that this decision will not have a dramatic impact on overall global export volumes, as the flows will simply be restructured.
However, independent expert Alexander Korbut warns of local risks. Kazakhstan is traditionally the largest buyer of Siberian grain.
The loss of this sales channel will create a supply glut in Russian border regions, which will further reduce already low wheat purchase prices.
Moreover, Yevgeny Gan, Chairman of the Founding Board of the Kazakhstan Grain Processors’ Union, notes that the decline in Russian wheat prices will inevitably push down the price of Russian flour.
Consequently, local businesses are already lobbying for a mirror ban on the import of finished flour products from Russia, to avoid losing out on competition in the domestic market.
Forecasts vs. Barriers
The restrictions are being introduced contrary to official market forecasts. Just in May, the Kazakhstan Grain Union stated that the country would enter the new season with a surplus of grain from previous years of approximately 2 million tons.
Experts emphasized that this volume took into account current supplies from Russia and did not pose any threat to domestic price stability. However, the government ignored the analysts’ arguments, opting for strict protectionist measures.
Farmers in the EAEU countries will once again have to adapt to changing rules of the game in the region, which de facto violate the principles of free movement of goods.
