Kazakhstan boosts agricultural exports, enhancing trade with EU

Kazakhstan is one of the non-European Union countries which will benefit from the European Investment Bank’s €465 million fund recently approved to support agriculture.

The fund is part of the Pan-European Agricultural Programme, a €3 billion programme launched in July to back agriculture and agribusiness investment initiatives.

The programme aims at enhancing sustainability, closing financing gaps, supporting young farmers, and advancing climate-resilient practices. It is the largest-ever financing initiative for the agricultural sector, approved by the European Investment Bank (EIB) Board.

Boosting exports

The funds come at a time when Kazakhstan is undertaking reforms to enhance its agricultural sector, and the Central Asian republic is seeking to not only meet domestic needs but also boost exports.

According to the Prime Minister’s Office, the government is reforming financial and subsidy systems to support agricultural enterprises and enhance the production and leasing of domestic agricultural machinery.

The country’s agricultural machinery production is set to grow from €498 million to €568 million by 2025. Machinery sales reportedly increased 52 per cent compared to the previous year.

Positive outlook

Kazakhstan has seen a rise in crop exports, in particular barley, lentils and corn. The Ministry of Agriculture expects this positive trend to continue even in the first half of 2025.

1.8 million tons of grain have already been exported in the period between September and October, marking an increase of 48 per cent compared to the same period last year.

Lentil exports increased sevenfold and reached 80,000 tons, most of which was sent to European countries. Rice producers increased exports by 47 per cent by developing new markets in Azerbaijan and Belarus.

In addition, for 2024-2025, Kazakhstan plans to break the record for exporting oil products to China, increasing the volume to $250 million. Oil processors anticipate reaching $300 million in exports of vegetable oils and grist to China.

The Ministry reaffirmed it is working on diversifying export routes and expanding sales markets. “The 2024 harvest is 45 per cent higher in terms of gross, as well as in quality, which creates a reserve for export sales,” it emphasised.

Exports to EU

Kazakhstan is one of the top ten grain exporters, supplying eight million tons of wheat and two million tons of flour to over 80 countries. It holds significant potential for increasing agricultural trade with the EU.

In his recent state visit to France, Kazakh President Kassym-Jomart Tokayev highlighted his country’s agricultural importance for global food security. Therefore, he encouraged French firms to explore investment and technological partnerships.

In his previous capacity as Agriculture Commissioner, Janusz Wojciechowski described Kazakhstan as a growing market opportunity for European agricultural food and beverage exports.

Under the former Commission mandate, he led a delegation of 39 agri-food businesses and organisations from across the EU to Astana and Almaty and discussed ways to expand cooperation in the sector with Kazakh Prime Minister Oljas Bektenov.

Given the strategic importance Kazakhstan has gained since the beginning of the Russian invasion of Ukraine, new Agriculture Commissioner Christophe Hansen might be encouraged to take cooperation one step further.

As it is, Italy is Kazakhstan’s biggest exporting partner, with export volumes reaching $13 billion in 2022. China comes in second with exports worth $10 billion, followed by the Russian Federation with $8 billion.

The Netherlands, France, Romania, and Spain find themselves in the top ten exporting partners of Kazakhstan, with notably lesser export volumes compared to Italy, highlighting the space and potential for agricultural trade to grow.

Logistical challenges

But despite the potential for growth, logistical challenges and access to international markets remain key issues in the sustainable development of Kazakhstan’s agricultural sector.

An October report by the United States Department of Agriculture argues that these challenges, coupled with a lower wheat quality outlook due to poor weather during harvest and trade issues with Russia, forced Kazakhstan to lower its wheat export estimate.

Farmers in Kazakhstan have noted bids are lower this harvest due to quality concerns, while traders hope that low prices might be the cure to bring back demand from markets such as Iran and Azerbaijan.

The report also mentions allegations arising from Kazakh exporters who claim that the stealing of grain shipments from sealed wagons when transiting through the territory of Uzbekistan has turned into a regular practice.

It also positively notes that Kazakhstan continues to boost its transit potential between China and Europe through the Middle Corridor, which, as of August, saw 2.2 million tons of cargo being transported through it, 27 per cent more than the same period last year.

[Edited By Brian Maguire | Euractiv’s Advocacy Lab ]