Fat and oil industry of Kazakhstan is under constant pressure – NOPA




The fat and oil industry of Kazakhstan is under constant pressure from resellers who are interested in the abolition of duties on the export of sunflower seeds. This is a serious problem for the further stable functioning and development of not only the oil and fat industry but also related ones – livestock, poultry, feed, and confectionery. This opinion was expressed by the National Oilseed Processors Association (NOPA).

“Individual deputies, representatives of parties, officials, not having solid knowledge in the fat and oil industry, unreasonably “push through” the position on the abolition of the export duty on the export of sunflower seeds. But then our republic will remain a raw material appendage without its own processing industry, increasing its import dependence on finished products every year. How will the poultry and livestock industries, confectionery, feed mills develop without the oil and fat industry? Will the country ensure food security in terms of sunflower oil, meat, dairy, and confectionery products? If deputies and party representatives really want to understand the situation, why don’t they meet with oil refineries, listen to their reasonable arguments, figures, facts, why don’t look at the successful world experience of industry leaders?” – the representatives of the fat and oil industry ask questions.

According to the Association, today the demand for sunflower seeds in the domestic market of Kazakhstan is 3 times higher than its production.

Meanwhile, there is a big problem in Kazakhstan such as overestimated statistics on oilseed reserves, and all decisions on state regulation of the industry are made based on official statistics.

“It should be noted that at the beginning of April, according to official statistics, the balance of food sunflower seeds totaled 756 thsd tonnes. While according to NOPA – about 460 thsd tonnes (a discrepancy of more than 30%). In April-May, up to about 150 thsd tonnes of seeds will be processed. That is, sunflower seeds stocks at the end of May, taking into account imports and exports, will decrease to 360 thsd tonnes, and until October they will practically be minimal. Those who write about sunflower reserves of more than 1 mln tonnes either do not understand the market or deliberately try to create informational noise to undermine the situation,” said Yadykar Ibragimov, head of NOPA.

The processing industry is actively developing in Kazakhstan, which directly affects the prices of socially significant products. Currently, the bid price for sunflower oil from oil refineries is on average 560-570 tenge/l (a decrease of more than 30% compared to prices in December 2022). For 8 months of 2022/23 MY, the production of sunflower oil in Kazakhstan exceeded 291 thsd tonnes, which is 81% more y-o-y.

According to the head of the NOPA, if the interests of certain groups are placed above the national ones, this poses a direct threat to food security and will lead to an increase in inflation.

“Cheap populism on the part of lobbyists for the export of raw materials misleads both the population of the country and the relevant ministries, which do not have a clear position. In this situation, the relevant ministries should make decisions based on the priority tasks set by the head of state – the development of deep processing and the export of value-added products. Moreover, the government has set the task of reducing the inflation rate by 2 times by the end of this year. In order to fulfill all these tasks, development of internal processing is a necessary condition,” the NOPA noted.