The Agency for the Protection and Development of Competition conducted an analysis of the state of competition in the market for the production and wholesale of sunflower oil for the period 2020 and January-June 2021 within the borders of the Republic of Kazakhstan. Experts named the reasons for the increase in prices, export volumes and barriers in the market, World of NAN reports with reference to the AZRK.
In the course of the analysis, it was found that the production of sunflower oil is carried out by 8 major large plants, which are located in 6 regions of the republic. 152 entities are engaged in wholesale sales of sunflower oil in the regions of the republic.
The sunflower oil market is highly concentrated. In the period from 2017 to October 2020, there is no increase in prices for sunflower oil, and from October 2020 to 2021, the cost of oil increased 7 times.
The main factors of the increase are: the growth of purchase prices for raw materials due to the reduction of producers' stocks of raw materials from last year's harvest; orientation of prices to world prices; crop failure in Kazakhstan and in the world; increase in the cost of purchasing water by 0.25 MCI; import dependence.
According to the balance of the sunflower oil market for 2021, the production of sunflower oil in the republic, taking into account the export volume, does not cover the needs of the republic: imported products in the domestic market account for more than 30% (production - 323,218.0 tons, export - 111,266.7 tons , import - 101,444.4 tons, sales - 313,395.8 tons).
The main barriers in this product market are the need for significant financial investments, the lack of sunflower oilseeds and the increase in the cost of raw materials.
The development of competition in this market is constrained by the presence of administrative barriers, the experts concluded. Based on the analysis data, AZRK sent proposals to the Ministry of Economy to include measures in the Set of Measures to Control and Reduce Inflation for 2022-2024.