Strengthening the role of the Food Corporation in the market will help maintain maximum benefits from the sale of grown agricultural products to small and medium-sized farmers, who make up 80% of the total number of farmers in the country. At the moment, changes to the development program of the Food Corporation are being considered, giving it the status of an operator in the grain market. This proposal was met with mixed reactions on the market, after which the corporation itself decided to comment on the upcoming changes.
“The dishonesty of some traders significantly affects ordinary farmers, who are forced to sell their grain at dictated prices, which are sometimes lower than the cost of grain production. This situation could bankrupt domestic farmers and jeopardize the country’s food security,” the Food Corporation said.
One of the promising destinations for wheat exports today is China. The Food Corporation emphasized that the Chinese market is very regulated, which makes it difficult for companies to access it. Therefore, the Food Corporation will provide farmers with its opportunities to export to China, which will help maintain fair export prices for grains and limit dumping by unscrupulous traders.
The Food Corporation reported that in 2023 it reached an agreement with a Chinese company to supply wheat at a favorable price.
“However, the partners suspended the purchase of wheat due to price dumping by Kazakh traders at lower prices. Thus, an effective strategy and a unified export policy will lead to market stability, as a result of which export prices will be beneficial for all participants in the grain market,” the company emphasized.
The transformation of the Food Corporation into a major player in the grain market will be carried out gradually as export volumes grow. To help farmers, the corporation will ensure coordination of the actions of Kazakhstani participants. As part of this work, it is planned to: conduct negotiations with foreign government agencies and national companies, branding products, forming large batches and ensuring the regularity of supplies of goods that meet the necessary standards required by foreign partners, etc.
As the Food Corporation reported, in its work it will be guided by the experience of leading countries such as Canada, China and others. During the development of the agro-industrial complex, these countries regulated trade in agricultural products at the state level through market mechanisms. Regulation was carried out through a specialized organization.
“When the country’s agriculture reaches maturity, the Food Corporation will allow the market to function independently through market relations,” the company reported.
At the moment, the Procorporation already plays a stabilizing role in the market by purchasing grain during periods of low prices, as well as by selling cheaper grain to flour mills, livestock and poultry farms at a price below the market price.