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Agriculture
- Review on crop farming
- Review on livestock farming
- Review on cotton fiber
Review on crop farming
Agro-industrial complex of Kazakhstan is a priority for the state. One of the most important factors for the sustainable development of the agro-industrial complex is the orientation at the economical efficiency of agricultural production and processing, which involves the rational and complex use of land, labor, material and natural resources, a special role is assigned to the rational development in the territorial aspect, facilitating more efficient use of basic types of resources.
The main directions in the crop farming – is production of cereal crops, oil-bearing crop, horticultural crop and feeding crop. The northern regions of the country produce grain legumes and oil-bearing crop, the southern regions in addition to cereal crops and oil-bearing crop produce horticultural crop, industrial crops.
The first part of this review is a description of the contribution of the sector and the structure of Kazakhstan agriculture, further the domestic market for crop farming, the historical information on the development of the industry, existing barriers and limitations are considered and a list of potential opportunities for entrepreneurial initiatives is provided.
In 2014, the gross output of the agriculture amounted to 2.5279 bln. tenge, 52% of the gross agricultural output accounted for crop production, 1.3279 bln. tenge. Since 2003, the gross output of crop production increased 3.8 times.
Figure 1. Gross output of agriculture and livestock farming in 2003-2014, mln. tenge in current prices
Gross output of agriculture |
Gross output of crop farming |
In January-July 2015 the volume of gross agricultural output amounted to 804.4 bln. tenge, which is higher by 2.9% than the level of the corresponding period of the previous year. At the same time, the volume of livestock farming amounted to 688.4 bln. tenge (IFO – 103%), crop farming – 114.4 bln. tenge (IFO – 102.2%).
Cultivated area is more than 20 mln. ha, with that, more than half of all cultivated land is concentrated in the northern regions of the country (Kostanay, Akmola and North Kazakhstan). The main directions in crop farming – is the production of cereal crops, oil-bearing crop, horticultural crop and feeding crop. The northern regions of the country produce grain legumes and oil-bearing crop, the southern regions in addition to cereal crops and oil-bearing crop produce horticultural crop, industrial crops.
Oil-bearing crop area increased by 0.2 mln. ha compared to 2011 and accounted for 2.0 million. ha in 2015. By that, their share has increased from 8.6% in 2011 to 9.5% in 2015. Similarly, the area of feeding crop increased by 1.2 mln. ha and amounted to 3.7 mln. ha with the share of 17.5% against 11.8%. The area of vegetables also increased during those years – by 12.2 thou. ha (0.6%), melons – by 26.5 thou. ha (0.4%).
According to the MNE RK Statistics Committee for the production of agricultural products in volume terms over the period of 1991 – 2014, the volume of production of cereal crops, including wheat, was only 13.3 million tons in 1991. The following years were marked by a high rate of growth of cereal crops production that led to a reduction in the production of other crops, and therefore today a policy of diversification of wheat to oil-bearing crops, legumes and other crops is being carried out.
Production of oil-bearing crop, cotton, vegetables and potatoes significantly increased compared to 1991, while the figures for oil-bearing crop also surpassed the production indicators of the Kazakh SSR.
Table 1. Production of main kinds of agricultural production in volume terms, thou. tons
Product |
1991 |
1992 |
2013 |
2014 |
Cereal crops |
13 274 |
33 247 |
18 981 |
17 162 |
wheat |
6 889 |
18 285 |
14 596 |
12 997 |
Sunflower |
108 |
122 |
573 |
513 |
Cotton plant |
291 |
252 |
397 |
321 |
Sugar beet |
726 |
1 276 |
65 |
24 |
Vegetables |
955 |
985 |
3 242 |
3 470 |
Potatoes |
2 143 |
2 570 |
3 344 |
3 411 |
Source: According to the MNE RK Statistics Committee
1.2. Sectoral structure.
The gross output of agriculture in the Republic of Kazakhstan amounted to 2.5 bln. tenge in 2014. Crop and livestock products are relatively equal in value terms. The largest share in the cost of the produced agricultural products have: grain and grain legumes crops – 19%, dairy cattle – 15%, cattle breeding – 14%, vegetables – 10%, feeding crop – 9% and breeding of small cattle – 6%.
Table 2.Structure of the agriculture production of the Republic of Kazakhstan in 2014
Production |
Output of products, mln. tenge |
In % to total |
Agricultural products in total |
2 527 890 |
100% |
Crop farming production |
1 327 855 |
52.5% |
Cultivation of cereal crops and leguminous crops, including seed growing |
478 338 |
18.9% |
Cultivation of rice |
15 526 |
0.6% |
Cultivation of oil-bearing crop and their seeds |
85 113 |
3.4% |
Cultivation of potatoes and planting stock |
180 977 |
7.2% |
Cultivation of vegetables, their seeds and planting material |
259 695 |
10.3% |
Cultivation of sugar beet and seeds |
175 |
0.0% |
Cultivation of cotton plant |
25 547 |
1.0% |
Cultivation of feeding crop and their seeds |
238 107 |
9.4% |
Cultivation of grapes |
9 363 |
0.4% |
Cultivation of pomaceous fruit and stone fruit |
24 047 |
1.0% |
Livestock farming |
1 189 555 |
47.5% |
Source: According to the MNE RK Statistics Committee
In the rating of production in monetary amount, the main branch of agriculture in 2014 is the production of cereal crops, they accounted for 19% of gross output in agriculture, they are lower than in 2013 – 22%. In 2014, the gross output of cereal crops industry decreased by 10% compared to 2013 (from 530 to 478 bln. tenge).
Table 3.Rating of production in monetary amount in agricultural branches
Agricultural branch |
2013 |
2014 |
||
mln. tenge |
in % to total |
mln. tenge |
in % to total |
|
Total |
2 386 103 |
100 |
2 527 890 |
100 |
Cultivation of cereal crops and leguminous crops |
530 254 |
22.2 |
478 338 |
18.9 |
Cultivation of vegetables |
203 214 |
8.5 |
259 695 |
10.3 |
Cultivation of feeding crop |
250 945 |
10.5 |
238 107 |
9.4 |
Cultivation of potatoes |
161 039 |
6.7 |
180 977 |
7.2 |
Cultivation of oil-bearing crop |
90 515 |
3.8 |
85 113 |
3.4 |
Source: According to the MNE RK Statistics Committee
19% of all employees in the country were employed in agriculture in 2014. The main share accounts for the self-employed – 70% of those employed in agriculture.
In 2014, 1605 thou. people were employed in agriculture, 1145 thou. people were self-employed.
Table 4.Number of employees in agriculture in 2014
Indicator |
Number (thou. people) |
Employed population |
1 605 |
Employees |
461 |
Self-employed population |
1 145 |
Source: According to the MNE RK Statistics Committee
Labour productivity in agriculture increased more than 7 times in the period since 2003. The greatest increase in productivity was in 2011 (50%) and in 2014 (37%).
Figure 2.Labour productivity in agriculture, thou. tenge for a person
Source: According to the MNE RK Statistics Committee
Labour productivity in agriculture increased more than 7 times in the period since 2003. The greatest increase in productivity was in 2011 (50%) and in 2014 (37%).
Over the past 10 years, agriculture output has increased 3.4 times, agricultural land area increased by 16 mln. ha (for 19.4% by 2005).
Productivity of 1 ha of agricultural land in 2014 amounted to 25.7 thou. tenge, this surpasses 2.8 times the productivity in 2005 – 9.1 thou. tenge per ha.
Table 5.Productivity of agricultural lands
Indicator |
2005 |
2011 |
2012 |
2013 |
2014 |
2014/ 2005, % |
Gross output of agricultural goods (services), bln. tenge |
749.1 |
2 286.0 |
1 999.0 |
2 386.1 |
2 527.9 |
337.5 |
Agricultural land, mln. ha |
82.2 |
93.7 |
93.4 |
96.3 |
98.2 |
119.4 |
Productivity of agricultural land, tenge/ha |
9112.9 |
24390.3 |
21396.6 |
24783.4 |
25747.5 |
282.5 |
Source: According to the MNE RK Statistics Committee
*-calculated
For the period from 2008 to 2014, investments in fixed assets in the sector of agriculture of the Republic of Kazakhstan increased by 123% – from 78 to 173 bln. tenge. Agricultural GDP during the same period increased by 101% – from 853 to 1718 bln. tenge. Thus, the investment growth rate surpassed GDP growth of the industry. The annual share of investments in GDP of the agriculture sector for the period under review ranged between 7-10% (see. Table below).
Table 6. GDP and investments in agricultural branches of the Republic of Kazakhstan in 2008-2014, in bln. tenge
Name |
2008 |
2009 |
2010 |
2011 |
2012 |
2013 |
2014 |
Growth 2008-14 |
Investments AC |
78 |
78 |
84 |
109 |
134 |
140 |
173 |
123% |
GDP AC |
853 |
1 045 |
984 |
1 409 |
1 330 |
1 621 |
1 718 |
101% |
Share of investments to GDP AC |
9% |
7% |
8% |
8% |
10% |
9% |
10% |
1% |
Source: According to the MNE RK Statistics Committee
The share of investments in the agricultural sector in total volume of investments in fixed assets in the Republic of Kazakhstan has been steadily growing since 2011. However, investments in agriculture in relative terms are still at the lower level than the industry contribution into the total GDP of the country (see. Figure below).
Share of agricultural industry in investments to fixed assets in RK
|
Share of agricultural industry in GDP
|
Regionally, the greatest share of investments accounts for the main cereal regions: Akmola, Kostanay and North Kazakhstan and also Almaty region, which have the largest market, the most favorable agro-climatic conditions for most of the sectors of the agriculture and processing industry (see Table below).
Information analysis about sources of investments shows that the largest share of investments – over 70% of the total amount of investments in the agriculture accounts for the own resources of entrepreneurs. The share of borrowed funds accounts for about 25%.
Table 7.Structure of investments into the agriculture by the sources of formation in 2009-2014, in bln. tenge
Name |
2009 |
2010 |
2011 |
2012 |
2013 |
2014 |
Share, % |
Investments in fixed assets, including: |
77.5 |
83.6 |
109.4 |
133.9 |
139.6 |
173.3 |
100.0 |
own funds of entrepreneurs |
54.4 |
46.3 |
80.1 |
103.6 |
105.8 |
132.3 |
72.8 |
borrowed funds |
18.3 |
35.1 |
25.2 |
28.2 |
30.9 |
38.5 |
24.6 |
funds of the republican budget |
3.5 |
1.7 |
1.0 |
0.7 |
2.7 |
2.1 |
1.6 |
funds of the local budget |
1.3 |
0.5 |
1.3 |
0.1 |
0.3 |
0.5 |
0.5 |
foreign investments |
0.0 |
0.0 |
1.9 |
1.3 |
0.0 |
0.0 |
0.4 |
Source: According to the MNE RK Statistics Committee
Foreign investments in the agricultural sector of Kazakhstan were registered only in 2011-2012, their share did not exceed 2%. Foreign investments were made only into the Akmola and South Kazakhstan regions. Foreign investments to the agricultural sector of other regions of the Republic of Kazakhstan were not made. The share of local investments was 98% in 2011, 99% – in 2012.
Table 8.Share of local investments into the agriculture of RK in dynamics for 2008-2014, bln. tenge
Name |
2008 |
2009 |
2010 |
2011 |
2012 |
2013 |
2014 |
Growth 2008-14, % |
Investments into RK, including: |
77.8 |
77.5 |
83.6 |
109.4 |
133.9 |
139.6 |
173.3 |
123 |
- local |
77.8 |
77.5 |
83.6 |
107.5 |
132.6 |
139.6 |
173.3 |
123 |
- foreign |
0.0 |
0.0 |
0.0 |
1.9 |
1.3 |
0.0 |
0.0 |
0 |
Share of local investments% |
100 |
100 |
100 |
98 |
99 |
100 |
100 |
0 |
Source: According to the MNE RK Statistics Committee
In 2014, the foreign trade turnover of Kazakhstan amounted to 119450.6 mln. USD and it decreased by 10.5% compared to 2013, including export – 78237.8 mln. USD (7.6% less), import – 41212.8 mln. USD (15.6% less).
Cereal makes up more than half of the volume of the export of agricultural and food products.
Table 9.Structure of export and import of the Republic of Kazakhstan by main groups of goods in 2014
FEACN code |
Name of the group of goods |
export |
import |
||
mln. USD |
in % to total |
mln. USD |
in % to total |
||
Total |
79 459.8 |
100.0 |
41 295.5 |
100.0 |
|
01-24 |
Products of animal and vegetable origin. finished food products included |
2 637.7 |
3.3 |
4 335.9 |
10.5 |
Source: According to the MNE RK Statistics Committee, State Revenue Committee MF RK
Export to Russia in 2014 amounted to 5178.1 million USD (by 11.9% less compared to 2013), import – 13730.3 USD (by 23.6% less). Agricultural and food products were imported for 1612 mln. USD, these are mostly dairy products, flour confectionery goods, tobacco and so on.
Export to the Republic of Belarus in 2014 amounted to 29.2 mln. USD (in 2013 by 49.9% less), import – 727.6 mln. USD (by 4.2% more). The share of agri-food products and food products amounted to 18.3% (more than 40% of this amount accounted for dairy products).
Export to China in 2014 amounted to 9815 mln. USD, import – 7367 mln. USD.
Export to the Kyrgyz Republic in 2014 amounted to 705 mln. USD, import – 351 mln. USD. Agricultural products make up the bulk of the export; their share was 39% (cereal crops, tobacco and tobacco products). Textiles (clothes) – 27%, agri-food products (dairy products, vegetables and fruits) are mainly imported.
Export to Uzbekistan in 2014 amounted to 1083 mln. USD, import – 1018 mln. USD. Agri-food products make up the bulk of the export; their share was 45.8% (flour, cereal crops). Agri-food products are also mainly imported, (vegetables and fruits) – 42%.
1.3. Capacity of the domestic market.
Cultivation of cereal crops and oil-bearing crop
Production of cereal crops is a priority for Kazakhstan. At the same time, for the past six years the area under oil-bearing crop culture has been actively expanding, due to the greater attractiveness of oil-bearing crop production. It manifested itself most clearly in 2011, when oil-bearing crop increased by 487 thou. ha, and wheat decreased by 489 thou. ha. Today the acreage of oil-bearing crop is more than 2.3 mln. ha. By that gross collection of oil-bearing crop in 2014 amounted to 1.5 mln. tons. This represents 0.2% of the world production of oil-bearing crop. However, the increase in oil-bearing crop production for the five-year period was 50%. And in ten years since 2003, the production of oil-bearing crop increased almost 4 times. Major oil-bearing crop cultivated in Kazakhstan are sunflower, rapeseeds, linseeds, soybean and safflower. According to experts in Kazakhstan, annually oil-bearing crop may be produced in the amount of up to 6-8 mln. tons.
Sunflower is the main oilseed crop in Kazakhstan and covers about 55% of oilseed crops. In 2014, the crop acreage of sunflower amounted to 849 thou. ha, of which about 44% accounted for East Kazakhstan region. In 2014, the gross collection of sunflower seeds in Kazakhstan amounted to 512 thou. tons, of which 54% were collected in East Kazakhstan region, 13% in Pavlodar region and about 12% in Kostanay region. For 2010-2014 the gross collection of sunflower in total increased by nearly 200 thou. tons.
Table 10.Dynamics of acreage and sunflower gross collection
Region |
2003 |
2004 |
2005 |
2006 |
2007 |
2008 |
2009 |
2010 |
2011 |
2012 |
2013 |
2014 |
Acreage, thou. ha |
447.2 |
458.4 |
453.8 |
495.9 |
365.4 |
570.3 |
722.2 |
870.1 |
955.9 |
791.2 |
878.2 |
849.2 |
Gross collection, thou. tons |
292.6 |
265.6 |
267.4 |
268.0 |
205.8 |
185.8 |
367.9 |
328.9 |
409.1 |
400.3 |
572.7 |
512.8 |
Source: SC MNE RK
Soybeans are grown in the south on irrigated lands. The total area of land allotted to soybeans, is about 5% in the structure of all irrigated lands. During 2010 – 2014, the positive dynamics of increase in acreage of soybeans was observed in Kazakhstan, which is associated with an increase in domestic demand. Seeded field reached 119.1 thou. ha in 2014, that figure is 4.5 times greater than in 2003. The gross collection in 10 years increased 6 times and in 2014 amounted to 217 thou. tons.
Table 11.Dynamics of acreage and gross collection of soybeans
Region |
2003 |
2004 |
2005 |
2006 |
2007 |
2008 |
2009 |
2010 |
2011 |
2012 |
2013 |
2014 |
Acreage, thou. ha |
27.8 |
32.8 |
37.1 |
47.0 |
49.7 |
51.2 |
53.0 |
61.8 |
70.7 |
82.2 |
103.2 |
119.1 |
Gross collection, thou. tons |
37.9 |
46.7 |
62.6 |
76.9 |
83.3 |
88.7 |
94.3 |
113.9 |
133.2 |
169.8 |
203.3 |
217.9 |
Source: SC MNE RK
The acreage of rapeseeds in Kazakhstan is located in the northern region. Over the past four years, the crop acreage decreased almost 1.5 times from 353 thou. ha in 2010 to 264 thou. ha in 2013. In 2014, rapeseeds was sown on the area of 303 thou. ha.
Table 12.Dynamics of acreage and gross collection of rapeseeds
Region |
2003 |
2004 |
2005 |
2006 |
2007 |
2008 |
2009 |
2010 |
2011 |
2012 |
2013 |
2014 |
Acreage, thou. ha |
27.8 |
32.8 |
37.1 |
47.0 |
49.7 |
51.2 |
53.0 |
61.8 |
70.7 |
82.2 |
103.2 |
119.1 |
Gross collection, thou. tons |
7.3 |
4.3 |
32.6 |
63.3 |
118.3 |
82.7 |
107.2 |
109.2 |
148.5 |
116.9 |
241.8 |
241.5 |
Source: SC MNE RK
Linseeds are cultivated in the north and west of Kazakhstan. From 2010 to 2014 the acreage of linseeds has increased more than 3 times and reached 709 thou. ha. Important factors, contributing to the rise of acreage under this crop are the simplicity of cultivation technology and economical efficiency. The same machinery (seed drills, headers, combine harvesters) is used for linseeds production and for cereal crops. Dynamics of production of linseeds shows a substantial growth from 0.8 thou. tons in 2003 to 420 thou. tons in 2014. In fact, a new direction in the production of oil-bearing crop has been formed for 10 years, and this growth is due to a high profitability and relative universality of the cultivation technology.
Table 13.Dynamics of acreage and gross collection of linseeds
Region |
2003 |
2004 |
2005 |
2006 |
2007 |
2008 |
2009 |
2010 |
2011 |
2012 |
2013 |
2014 |
Acreage, thou. ha |
0.9 |
1.0 |
1.1 |
5.1 |
4.5 |
11.9 |
58.3 |
230.3 |
326.1 |
419.3 |
410.0 |
709.4 |
Gross collection, thou. tons |
0.8 |
0.8 |
1.1 |
5.4 |
5.2 |
10.3 |
47.7 |
94.6 |
273.0 |
157.9 |
295.0 |
420.0 |
Source: SC MNE RK
Safflower production is mainly concentrated in the southern and central regions of the country. From 2010 to 2014 safflower acreage increased 1.3 times and 2 times since 2003. Gross collection of safflower in 2014 amounted to 135 thou. tons, thus production over 10 years has increased 1.5 times.
Table 14.Dynamics of acreage and gross collection of safflower
Region |
2003 |
2004 |
2005 |
2006 |
2007 |
2008 |
2009 |
2010 |
2011 |
2012 |
2013 |
2014 |
Acreage, thou. ha |
0.9 |
1.0 |
1.1 |
5.1 |
4.5 |
11.9 |
58.3 |
230.3 |
326.1 |
419.3 |
410.0 |
709.4 |
Gross collection, thou., ton |
94.8 |
76.1 |
73.7 |
43.9 |
45.7 |
45.7 |
84.1 |
122.2 |
151.2 |
127.2 |
174.9 |
135.4 |
Source: SC MNE RK
The main oil-bearing crops grown in the country are: sunflower, rapeseeds, linseeds, safflower and soybeans.
From 2003 to 2014, soybean export rose 15 times, from 1.2 thou. tons to 19.9 thou. tons, which is 9% of the production. Linseeds were hardly produced in the country in 2003, but with the diversification of production in crop production, the production volume increased to 419 thou. tons, of which more than 50%, or 252 thou. tonns were exported. The quantity of export of rapeseeds in a decade has grown from zero to 127 thou. tons, thus 52% of all the produced rapeseeds is exported. Kazakhstan sunflowers are consumed domestically for 75%, by that, 147 thou. tons, or 25% is exported. 85% of safflower produced in the country or 114 thou. tons are consumed domestically and 15% or 21 thou. tons are exported.
Table 15.Dynamics of quantity of import and export for oilseed crops by kinds in dynamics from 2003 tо 2014, thou. tons
Product |
tons |
2003 |
2004 |
2005 |
2006 |
2007 |
2008 |
2009 |
2010 |
2011 |
2012 |
2013 |
2014 |
Soybeans |
Production |
38 |
47 |
63 |
77 |
83 |
89 |
94 |
114 |
133 |
170 |
203 |
218 |
Import |
0 |
0 |
16 |
7 |
47 |
1 |
4 |
0 |
0 |
0 |
63 |
4 |
|
Export |
1 |
2 |
1 |
1 |
3 |
5 |
4 |
2 |
6 |
22 |
20 |
20 |
|
Consumption volume |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
|
Linseeds |
Production |
1 |
1 |
1 |
5 |
5 |
10 |
48 |
95 |
273 |
158 |
295 |
420 |
Import |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
1 |
0 |
1 |
2 |
7 |
|
Export |
0 |
0 |
0 |
0 |
5 |
5 |
24 |
27 |
103 |
231 |
142 |
252 |
|
Consumption volume |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
|
Rapeseeds |
Production |
7 |
4 |
33 |
63 |
118 |
83 |
107 |
109 |
148 |
117 |
242 |
241 |
Import |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
2 |
0 |
5 |
2 |
4 |
|
Export |
0 |
0 |
3 |
30 |
35 |
44 |
42 |
31 |
52 |
66 |
98 |
128 |
|
Consumption volume |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
|
Sunflower |
Production |
293 |
266 |
267 |
268 |
206 |
186 |
368 |
329 |
409 |
400 |
573 |
513 |
Import |
73 |
24 |
32 |
60 |
63 |
26 |
70 |
11 |
5 |
82 |
18 |
15 |
|
Export |
0 |
2 |
1 |
2 |
4 |
0 |
3 |
12 |
4 |
106 |
54 |
147 |
|
Consumption volume |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
1 |
0 |
|
Safflower |
Production |
95 |
76 |
74 |
44 |
46 |
46 |
84 |
122 |
151 |
127 |
175 |
135 |
Import |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
|
Export |
0 |
0 |
4 |
2 |
1 |
0 |
0 |
0 |
0 |
5 |
19 |
21 |
|
Consumption volume |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
Source: SC MNE RK
Analysis of the balance of resources and consumption of sunflower seeds shows that from 2003 to 2014 a simultaneous increase of sunflower use for processing in food purposes and for export was observed along with the increase in production. Export has doubled and reached 147 thou. tons since 2003. In 2014, twice more sunflower seeds were processed for food purposes than in 2003.
Table 16.Balance of resources and consumption of sunflower seeds, thou. tons
Name of the indicator |
2003 |
2004 |
2005 |
2006 |
2007 |
2008 |
2009 |
2010 |
2011 |
2012 |
2013 |
2014 |
Reserves for the beginning of the year |
90 |
98 |
101 |
162 |
159 |
63 |
73 |
211 |
201 |
261 |
234 |
402 |
Production |
293 |
266 |
267 |
268 |
206 |
186 |
368 |
329 |
409 |
400 |
573 |
513 |
Import |
1 |
24 |
32 |
60 |
63 |
26 |
70 |
11 |
5 |
82 |
18 |
15 |
Total resources |
384 |
388 |
401 |
490 |
427 |
275 |
510 |
551 |
615 |
743 |
825 |
930 |
Production consumption |
14 |
13 |
14 |
17 |
11 |
16 |
21 |
22 |
19 |
18 |
20 |
20 |
For forage |
2 |
2 |
2 |
3 |
2 |
2 |
2 |
3 |
4 |
4 |
4 |
4 |
For seeds |
11 |
11 |
11 |
14 |
9 |
15 |
19 |
20 |
15 |
15 |
16 |
16 |
Processed for food purposes |
187 |
256 |
210 |
295 |
334 |
171 |
254 |
287 |
307 |
360 |
323 |
369 |
Loss |
6 |
5 |
6 |
7 |
5 |
4 |
8 |
9 |
10 |
12 |
14 |
15 |
Export |
73 |
2 |
1 |
2 |
4 |
0 |
3 |
19 |
4 |
106 |
54 |
147 |
Personal consumption |
6 |
10 |
9 |
10 |
10 |
11 |
13 |
13 |
13 |
12 |
12 |
12 |
Per capita consumption, kg/year |
0 |
1 |
1 |
1 |
1 |
1 |
1 |
1 |
1 |
1 |
1 |
1 |
Reserves for the end of the year |
98 |
101 |
162 |
159 |
63 |
73 |
211 |
201 |
261 |
234 |
402 |
366 |
Source: SC MNE RK
According to the balance of resources and consumption of soybeans of the MNE RK Statistics Committee in 2014, the volume of resources has increased 6 times compared to 2003. By that, the dynamics of industrial consumption, processing for production purposes and export also tend to increase more than 5 times in total.
Table 17.Balance of resources and consumption of soybeans, thou. tons
Name of the indicator |
2003 |
2004 |
2005 |
2006 |
2007 |
2008 |
2009 |
2010 |
2011 |
2012 |
2013 |
2014 |
Production |
37.9 |
46.7 |
62.6 |
76.9 |
83.3 |
88.7 |
94.3 |
113.9 |
133.2 |
169.8 |
203.3 |
217.9 |
Import |
0.3 |
0.0 |
16.1 |
7.0 |
47.3 |
0.5 |
4.1 |
0.1 |
0.4 |
0.5 |
63.1 |
4.2 |
RESOURCES IN TOTAL |
38.1 |
46.7 |
78.7 |
83.9 |
130.5 |
89.2 |
98.5 |
114.0 |
133.6 |
170.3 |
266.4 |
222.1 |
Consumed at the domestic market |
36.9 |
44.3 |
78.0 |
82.5 |
127.9 |
84.6 |
94.6 |
111.7 |
127.1 |
148.4 |
245.9 |
202.2 |
Export |
1.2 |
2.4 |
0.7 |
1.4 |
2.7 |
4.6 |
3.9 |
2.3 |
6.4 |
21.9 |
20.5 |
19.9 |
Source: SC MNE RK
The total volume of rapeseed resources in 2014 amounted to 245 thou. tons that is more than 30 times higher than in 2003. The consumption of rapeseeds in the period 2003-2014 also increased from 7.4 thou. tons in 2010 to 117 thou. tons in 2014, due to the processing of rapeseeds. Export in 2014 amounted to about 127 thou. tons.
Table 18.Balance of resources and consumption of rapeseeds, thou. tons
Name of the indicator |
2003 |
2004 |
2005 |
2006 |
2007 |
2008 |
2009 |
2010 |
2011 |
2012 |
2013 |
2014 |
Production |
7.3 |
4.3 |
32.6 |
63.3 |
118.3 |
82.7 |
107.2 |
109.2 |
148.5 |
116.9 |
241.8 |
241.5 |
Import |
0.0 |
0.0 |
0.3 |
0.5 |
0.2 |
0.3 |
0.2 |
1.7 |
0.2 |
5.3 |
2.1 |
3.5 |
RESOURCES IN TOTAL |
7.4 |
4.4 |
32.9 |
63.8 |
118.6 |
83.0 |
107.5 |
110.9 |
148.6 |
122.2 |
243.9 |
245.0 |
Consumed at the domestic market |
7.4 |
4.4 |
29.9 |
33.4 |
83.6 |
39.3 |
65.1 |
80.2 |
96.5 |
55.8 |
146.4 |
117.4 |
Export |
0.0 |
0.0 |
3.0 |
30.4 |
35.0 |
43.6 |
42.4 |
30.7 |
52.2 |
66.3 |
97.6 |
127.6 |
Source: SC MNE RK
During the period 2003-2014, an increase by 426 thou. tons is observed in the balance of linseeds as a result of the production growth. The increase is also observed in the balance of consumption as export supply of linseeds also increased. In 2014, the amount of resources amounted to 426.6 thou. tons in total, export amounted to 252 thou. tons.
Table 19.Balance of resources and consumption of linseeds, thou. tons
Name of the indicator |
2003 |
2004 |
2005 |
2006 |
2007 |
2008 |
2009 |
2010 |
2011 |
2012 |
2013 |
2014 |
Production |
0.8 |
0.8 |
1.1 |
5.4 |
5.2 |
10.3 |
47.7 |
94.6 |
273.0 |
157.9 |
295.0 |
420.0 |
Import |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.2 |
0.1 |
0.9 |
0.1 |
1.0 |
1.6 |
6.6 |
RESOURCES IN TOTAL |
0.8 |
0.8 |
1.1 |
5.4 |
5.3 |
10.5 |
47.7 |
95.5 |
273.1 |
158.9 |
296.7 |
426.6 |
Consumed at the domestic market |
0.8 |
0.8 |
1.1 |
5.1 |
0.6 |
5.2 |
24.0 |
68.8 |
170.0 |
-72.4 |
154.3 |
174.5 |
Export |
0.0 |
0.0 |
0.0 |
0.3 |
4.6 |
5.3 |
23.7 |
26.7 |
103.0 |
231.3 |
142.3 |
252.1 |
Source: SC MNE RK
From 2003 to 2014, safflower production increased nearly 2 times, export has increased from zero to 21 thou. tons in the last three years.
Table 20.Balance of resources and consumption of safflower, thou. tons
Name of the indicator |
2003 |
2004 |
2005 |
2006 |
2007 |
2008 |
2009 |
2010 |
2011 |
2012 |
2013 |
2014 |
Production |
95 |
76 |
74 |
44 |
46 |
46 |
84 |
122 |
151 |
127 |
175 |
135 |
Import |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
Export |
0 |
0 |
4 |
2 |
1 |
0 |
0 |
0 |
0 |
5 |
19 |
21 |
Consumption volume |
95 |
76 |
70 |
42 |
45 |
46 |
84 |
122 |
151 |
122 |
156 |
114 |
Source: SC MNE RK
In 2014, export of oil-bearing crop from Kazakhstan amounted to more than half a million tons, this figure has increased almost 8 times over the past five years. It may be predicted that oilseed export will increase 1.5 – 2 times by 2020. Restraints in growth are associated with the possibilities of production within the country, and not with the potential of markets. Compliance with agrotehnolgy along with focused government policies aimed at the diversification of crop production over the long term could make a significant contribution to the increase in production and hence the export of oil-bearing crop, in particular: rapeseeds, linseeds, soybeans.
Cereal crops
The main cereal crop grown in Kazakhstan is wheat. Annual wheat production in Kazakhstan amounted up to 13.5 thou. tons for the period from 2003 to 2014. The maximum harvest was 17 mln. tons in 2009.
The main grain-producing regions of the country are Akmola, Kostanay, North Kazakhstan regions.
Modern agriculture policy is aimed at diversifying the crop area and departure from the monoculture of wheat with the widespread introduction of crop rotations with forage and a simultaneous increase of the production of livestock farming.
Table 21.Wheat production in RK, thou. tons
Region |
2003 |
2004 |
2005 |
2006 |
2007 |
2008 |
2009 |
2010 |
2011 |
2012 |
2013 |
2014 |
Republic of Kazakhstan |
11537.4 |
9937.0 |
11198.3 |
13460.5 |
16466.9 |
12538.2 |
17052.0 |
9638.4 |
22732.1 |
9841.1 |
14595.6 |
12996.9 |
Source: SC MNE RK
Table 22.Balance of production and consumption of wheat, thou. tons
Indicator |
2003 |
2004 |
2005 |
2006 |
2007 |
2008 |
2009 |
2010 |
2011 |
2012 |
2013 |
2014 |
Production |
11 537.4 |
9 937.0 |
11 198.3 |
13 460.5 |
16 466.9 |
12 538.2 |
17 052.0 |
9 638.4 |
22 732.1 |
9 841.1 |
14 595.6 |
12 996.9 |
Consumption |
8 542.2 |
7 568.3 |
9 491.5 |
8 343.3 |
8 666.3 |
9 283.4 |
9 431.5 |
10 805.5 |
9 146.7 |
9 246.0 |
9 522.8 |
9 284.8 |
Trade* |
2 995.2 |
2 368.6 |
1 706.8 |
5 117.2 |
7 800.6 |
3 254.8 |
7 620.5 |
- 1 167.1 |
13 585.4 |
595.1 |
5 072.8 |
3 712.1 |
Source: SC MNE RK
Kazakh wheat is exported to more than 70 countries of the world with an extensive geography. Traditionally the biggest importers of Kazakh wheat are Azerbaijan, Russia, Turkey, Tajikistan, Uzbekistan, Iran and Kyrgyz Republic.
At the market of the Kyrgyz Republic, Kazakh wheat takes up almost 100% of import with the volume of supply 461 thou. tons in 2014.
A similar situation is observed in the wheat import to Tajikistan, where 744.8 thou. tons of Kazakh wheat were supplied in 2014, which accounted for almost 100% of import.
In Uzbekistan, the Kazakh wheat takes up 100% of import with the volume of supply 953.5 thou. tons in 2014.
Azerbaijan imported 1 378.6 thou. tons of wheat in 2014. Kazakhstan share was 32% with the volume of 439.5 thou. tons. The leader of supply to this country is Russia with the volume of 936,6 thou. tons, or 68% of the market.
In 2014, Iran imported 7.365 mln. tons of wheat from countries such as Germany, Russia, Lithuania, Australia, Kazakhstan, Latvia, Ukraine, Canada. This country has access to the sea, so the geography of supply is quite extensive. Kazakhstan share here in 2014 was 10% with the volume of 696.6 thou. tons. Russian share is 19% with the volume of 1 371.9 thou. tons. The leader is Germany with the volume of 2 598.4 thou. tons, or 35% of the market.
Turkey imported 5.28 mln. tons of wheat in 2014. Russian share was 77%. Kazakhstan supplied 161.8 thou. tons, or 3% of total supply.
Russia is one of the largest wheat producers. The volume of import of this product in 2014 in Russia amounted to 329.4 thou. tons. Kazakhstan share in supplies amounted to 99.4%.
Tomatoes
Tomatoes are produced in all regions of the country, but the main production is concentrated in the southern regions of the country. About 70% of acreage and gross collection of tomatoes is located in Almaty, Zhambyl and South Kazakhstan regions. This location of production is caused by the optimal natural and climatic conditions for the cultivation of tomatoes on the open field. During the period from 2005 to 2014 the area of cultivation of tomatoes increased. In 2005, the area under crops of tomatoes was 25.6 thou. ha. In 2014, the acreage increased to 28,6 thou. ha. Gross collection of tomatoes for the period from 2003 to 2014 increased from 541.3 thou. tons to 690.5 thou. tons.
Table 23. Dynamics of acreage and gross collection of tomatoes in Kazakhstan for 2005-2014
Indicator |
2005 |
2006 |
2007 |
2008 |
2009 |
2010 |
2011 |
2012 |
2013 |
2014 |
Acreage, thou. ha |
453.8 |
495.9 |
365.4 |
570.3 |
722.2 |
870.1 |
955.9 |
791.2 |
878.2 |
849.2 |
Gross collection, thou. tons |
541.3 |
510.8 |
515.2 |
549.3 |
580.9 |
593.4 |
609.4 |
650.7 |
653.7 |
690.5 |
Source: According to the MNE RK Statistics Committee
Statistics of recent years points to the satisfaction of more than 90% of domestic demand of Kazakhstan in tomatoes of own production.
Domestic consumption includes consumption of all economic subjects: the food industry, catering, household etc. The annual growth in domestic consumption of tomatoes, on the average by 34,5 thou. tons per year, is observed in the dynamics for 2005-2014. The average annual growth dynamics of production of tomatoes is lagging behind and is about 22,5 thou. tons. Consumption growth has led to a decrease in export. Unsatisfied domestic demand is substituted by the increasing import, but its share is small (not more than 7%). Although, there are direct surveys of population and trading providers, who argue that a massive tomato import from Uzbekistan and China is made in the off-season, which is not reflected in the official statistics.
Table 24. Balance of production and consumption of tomatoes for 2005-2014, thou. tons
Indicators |
2005 |
2006 |
2007 |
2008 |
2009 |
2010 |
2011 |
2012 |
2013 |
2014 |
Production |
541 |
511 |
515 |
549 |
581 |
593 |
609 |
651 |
654 |
690 |
Import |
0 |
0 |
2 |
5 |
7 |
21 |
44 |
36 |
37 |
50 |
Resources in total |
541 |
511 |
517 |
554 |
588 |
614 |
653 |
687 |
691 |
740 |
Export |
38 |
47 |
29 |
26 |
10 |
2 |
0 |
0 |
0 |
0 |
Domestic consumption |
503 |
464 |
488 |
528 |
577 |
613 |
653 |
687 |
691 |
740 |
Source: According to the MNE RK Statistics Committee, State Revenue Committee MF RK
Plants for the production of tomato paste are also located, as well as the production of tomatoes, in Almaty, Zhambyl and South Kazakhstan regions. Most of the manufacturers of tomato paste are located in Almaty, which has a high transport and logistic potential as a railway junction and logistics hub located on the highway Western China – Western Europe.
The existing infrastructure of vegetable storage and transport junctions in Almaty, Zhambyl and South Kazakhstan regions allows the storage and supply of tomatoes to the production capacity and export of finished products to wholesale warehouses.
Tomato export fell from 38.2 thou. tons in 2005 to 147 tons in 2014, the export of tomato paste from 662 tons in 2005 to 36 tons in 2014.
Table 25. Export of fresh tomatoes and tomato paste for 2005 – 2014, tons
Production |
2005 |
2006 |
2007 |
2008 |
2009 |
2010 |
2011 |
2012 |
2013 |
2014 |
Fresh tomatoes |
38 172 |
46 722 |
29 196 |
25 929 |
10 489 |
1 464 |
0 |
6 |
81 |
147 |
Source: SC MNE RK
Dynamics of import of fresh tomatoes is increasing annually, it amounted to 50.3 thou. tons in 2014 or 280 times higher than the figure of 2005. The major tomato suppliers are China and Uzbekistan. The countries above import the largest volume of production to the territory of Kazakhstan in the off-season.
Table 26. Import of fresh tomatoes for 2005 – 2014, tons
Country |
2005 |
2006 |
2007 |
2008 |
2009 |
2010 |
2011 |
2012 |
2013 |
2014 |
China |
67 |
12 |
13 |
4 432 |
6 506 |
8 607 |
9 967 |
18290 |
20915 |
25943 |
Uzbekistan |
32 |
16 |
1555 |
5 |
153 |
10258 |
30454 |
9454 |
12519 |
18327 |
Other countries |
81 |
137 |
194 |
326 |
436 |
1 774 |
3 241 |
8588 |
3978 |
6004 |
All countries |
179 |
165 |
1763 |
4763 |
7095 |
20640 |
43662 |
36332 |
37413 |
50274 |
Source: SC MNE RK
Apples
Gross harvest of apples in Kazakhstan over the past ten years shows approximately the same trend as yield and harvested acreage.
Table 27.Trend of gross harvest, harvested acreage and yield of apples in Kazakhstan in 2005-2014.
Index |
2005 |
2006 |
2007 |
2008 |
2009 |
2010 |
2011 |
2012 |
2013 |
2014 |
Gross harvest, thou. tons |
142 |
116 |
102 |
95 |
118 |
107 |
115 |
130 |
144 |
158 |
Harvested acreage, thou. ha |
34.1 |
26.2 |
24.4 |
25.8 |
26.1 |
29.7 |
29.1 |
30.3 |
30.3 |
30.4 |
Yield, tons/ha |
4.7 |
4.7 |
4.6 |
4.4 |
5.4 |
4.7 |
5.2 |
5.4 |
5.9 |
6.3 |
Source: Prepared according to data of the RK NEM Statistics Committee
Analysis of the balance of apple production and consumption shows that apple consumption increased by 55 thou. tons from 2010 to 2014. Production volume during that period increased by 51 thou. tons. The share of imports in domestic consumption for the entire period under report is about 50-60%.
Table 28.Balance of apple production and consumption for 2010-2014, thou. tons
Indices |
2010 |
2011 |
2012 |
2013 |
2014 |
Production |
107 |
115 |
130 |
144 |
158 |
Imports |
143 |
105 |
118 |
130 |
147 |
Total resources |
250 |
220 |
247 |
273 |
305 |
Exports |
0.1 |
0.1 |
0.1 |
0.1 |
0.5 |
Domestic consumption |
250 |
220 |
247 |
273 |
305 |
Source: Prepared according to data of the RK NEM Statistics Committee, the RK MF State Revenue Committee
The main volume of apple production (78% gross harvest) is accounted for Almaty and South Kazakhstan regions. Considering the main location of manufacturing facilities for the production of juices in these regions and Almaty city (97% of the total volume of facilities in 2014), there are no imbalances in the production of raw materials and the location of facilities.
Statistics Committee of the Ministry of National Economy in the Republic of Kazakhstan keeps records of the structure of retail group volume only on major food groups. Foods account for about 1.8 trillion tenge or 29% in the retail trade volume. In the structure of retail trade, the most food accounts for meat – 16%, dairy products – 10%, fruit and vegetables – 12%, and drinks – 13.8%, occupy a significant share. The volume of food retail trade increased by 4.3 times for the period from 2003 to 2014. It should be noted that RK NEM Statistics Committee does not keep records of the structure of retail trade volume by regions.
Table 29.Structure and trend of retail trade volume by individual product groups, bln. tenge
Goods |
2004 |
2005 |
2006 |
2007 |
2008 |
2009 |
2010 |
2011 |
2012 |
2013 |
2014 |
Total |
1,219 |
1,409 |
1,737 |
2,093 |
2,443 |
2,551 |
3,197 |
3,866 |
4,568 |
5,474 |
6,332 |
Trade in food products, of which are: |
419 |
490 |
592 |
689 |
820 |
930 |
1,050 |
1,226 |
1,418 |
1,610 |
1,821 |
Fresh fruits and vegetables |
43 |
53 |
67 |
70 |
69 |
70 |
94 |
107 |
131 |
163 |
222 |
of which are potatoes |
12 |
15 |
17 |
18 |
22 |
21 |
25 |
27 |
36 |
35 |
55 |
Source: the RK NEM Statistics Committee
In recent years, Kazakhstan from the exporter of apples has become their importer. The import volume of apples grew by 140 thou. tons in the last 10 years, and amounted to 147.2 thou. tons in 2014. After the Republic of Kazakhstan has joined the Customs Union, the growth of customs duties directly on apples was noted, respectively, some exporting countries, particularly, China, began almost three times less to import goods in 2014.
In 2014, the main importers of apples into Kazakhstan were Poland (43%), China (19%), and Belarus, Kyrgyzstan, Moldova, Uzbekistan amounted to 34% in the total volume.
Table 30.Trend of Kazakhstan import of apples for 2005-2014, thou. tons
Country |
2005 |
2006 |
2007 |
2008 |
2009 |
2010 |
2011 |
2012 |
2013 |
2014 |
Poland |
0.4 |
0.8 |
0.6 |
1.8 |
18.0 |
30.6 |
15.4 |
38.0 |
47.7 |
63.5 |
China |
2.9 |
0.6 |
0.2 |
47.2 |
119.3 |
94.9 |
51.7 |
33.0 |
36.0 |
28.2 |
Belarus |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.8 |
20.6 |
Kyrgyzstan |
0.6 |
1.0 |
0.2 |
0.1 |
0.1 |
7.2 |
26.0 |
29.8 |
30.2 |
15.7 |
Moldova |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.5 |
2.5 |
2.2 |
4.3 |
10.4 |
Uzbekistan |
0.0 |
0.0 |
0.1 |
0.0 |
0.0 |
1.1 |
1.6 |
3.0 |
1.6 |
2.8 |
Other countries |
4.3 |
3.6 |
3.7 |
8.0 |
8.4 |
8.8 |
8.0 |
11.6 |
9.0 |
5.9 |
All countries |
8.2 |
6.1 |
4.8 |
57.1 |
145.7 |
143.1 |
105.2 |
117.7 |
129.6 |
147.2 |
Source: Prepared according to data of the RK MF State Revenue Committee
The main importer of Kazakhstan apples is Russia.
Table 31.Trend of apples export from Kazakhstan for 2005-2014, thou. tons
Country |
2005 |
2006 |
2007 |
2008 |
2009 |
2010 |
2011 |
2012 |
2013 |
2014 |
Russia |
21.6 |
19.3 |
9.3 |
2.5 |
2.0 |
0.1 |
0.1 |
0.1 |
0.1 |
0.4 |
Other countries |
0.1 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.1 |
All countries |
21.7 |
19.3 |
9.3 |
2.5 |
2.0 |
0.1 |
0.1 |
0.1 |
0.1 |
0.5 |
Source: Prepared according to data of the RK MF State Revenue Committee
Russia is one of the major apple importing countries, whose import volume exceeded 1 mln. tons per year for the last years.
The main supplier of apples to the Russian market for 2010 - 2014 was Poland. At the same time, the volume of Polish apples import decreased in 2014 due to the ban on the import of vegetable and fruit products from Poland because of certification violations and identifying of quarantine facilities. Also in 2015 it is expected to significantly reduce imports from a number of the EU states and Moldova.
Table 32.Import of Russian apples, thou. tons/mln. USD
Exporting country |
2010 |
2011 |
2012 |
2013 |
2014 |
|||||
thou. tons |
mln. USD |
thou. tons |
mln. USD |
thou. tons |
mln. USD |
thou. tons |
mln. USD |
thou. tons |
mln. USD |
|
Poland |
348 |
210 |
289 |
164 |
601 |
328 |
706 |
389 |
419 |
227 |
Belarus |
0 |
0 |
0 |
0 |
25 |
14 |
67 |
27 |
175 |
51 |
Serbia |
88 |
54 |
94 |
68 |
59 |
46 |
69 |
48 |
124 |
100 |
China |
156 |
79 |
138 |
75 |
126 |
72 |
110 |
69 |
86 |
54 |
Azerbaijan |
40 |
19 |
42 |
20 |
55 |
26 |
37 |
18 |
43 |
19 |
Republic of Moldova |
153 |
59 |
184 |
69 |
142 |
54 |
182 |
70 |
33 |
14 |
Italy |
60 |
38 |
71 |
76 |
55 |
58 |
27 |
31 |
31 |
35 |
France |
44 |
27 |
48 |
51 |
38 |
42 |
17 |
19 |
22 |
24 |
Ukraine |
97 |
43 |
35 |
13 |
18 |
8 |
11 |
4 |
19 |
8 |
Other countries |
217 |
136 |
256 |
220 |
160 |
149 |
126 |
114 |
96 |
88 |
TOTAL |
1,204 |
666 |
1,158 |
757 |
1,279 |
797 |
1,352 |
789 |
1,050 |
621 |
Source: UNContrade
Sugar beet
Sugar beet production is concentrated in two regions of the country – Almaty and Zhambyl. Trend analysis of planting acreages and gross harvest of sugar beet shows that sugar beet planting acreages for the period from 2003 to 2014 are reduced in the country. If acreages in 2003 were equal to 22.3 thou. ha, in 2014 they were 2 thou. ha. Gross harvest of sugar beet has decreased by 400 thou. tons or 17 times in 2014 compared to 2003.
Table 33.Trend of planting acreages and gross harvest of sugar beet for 2003-2014
Indices |
2003 |
2004 |
2005 |
2006 |
2007 |
2008 |
2009 |
2010 |
2011 |
2012 |
2013 |
2014 |
Planting acreage, thou. ha |
22.3 |
22.8 |
19.2 |
14.6 |
13.7 |
19.1 |
19.0 |
20.1 |
21.0 |
19.1 |
4.9 |
2.0 |
Gross harvest, thou. tons |
424 |
398 |
311 |
339 |
309 |
130 |
181 |
152 |
200 |
152 |
65 |
24 |
Source: the RK NEM Statistics Committee
Analysis of the balance of resources and use of sugar beet shows that from 2003 to 2014 there is a decrease in all indices Volume of sugar beet production decreased from 424 thou. tons in 2003 to 24 thou. tons in 2014.
Table 34.Balance of resources and use of sugar beet in 2003-2014, thou. tons
Index |
2003 |
2004 |
2005 |
2006 |
2007 |
2008 |
2009 |
2010 |
2011 |
2012 |
2013 |
2014 |
Production |
424 |
398 |
311 |
339 |
309 |
130 |
181 |
152 |
200 |
152 |
65 |
24 |
Imports |
35 |
41 |
2 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
Total resources |
459 |
439 |
312 |
339 |
309 |
130 |
181 |
152 |
200 |
152 |
65 |
24 |
Exports |
0 |
0 |
0 |
0 |
0 |
0 |
3 |
0 |
0 |
0 |
0 |
0 |
For feed |
14 |
13 |
9 |
10 |
10 |
4 |
5 |
5 |
6 |
5 |
2 |
1 |
Losses |
9 |
8 |
6 |
6 |
7 |
3 |
3 |
3 |
4 |
3 |
1 |
0 |
Processed for food purposes |
436 |
418 |
297 |
322 |
293 |
124 |
170 |
144 |
191 |
144 |
61 |
23 |
Source: the RK NEM Statistics Committee
Raw cotton
Cotton plant production is concentrated only in the South Kazakhstan region. Trend analysis of planting acreages and gross harvest of cotton plants shows that cotton planting acreages for the period from 2003 to 2014 are reduced in the country. If acreages in 2003 were equal to 199.5 thou. ha, in 2014 they were 127.5 thou. ha. Gross harvest of cotton plants has decreased by 80 thou. tons or by 20% in 2014 compared to 2003.
Table 35.Trend of planting acreages and gross harvest of cotton plants for 2003-2014
Indices |
2003 |
2004 |
2005 |
2006 |
2007 |
2008 |
2009 |
2010 |
2011 |
2012 |
2013 |
2014 |
Planting acreage, thou. ha |
199.5 |
223.5 |
204.1 |
200.2 |
205.8 |
178.6 |
140.1 |
137.2 |
160.6 |
147.8 |
140.6 |
127.5 |
Gross harvest, thou. tons |
402.7 |
467.1 |
465.0 |
435.4 |
441.7 |
317.5 |
270.0 |
239.9 |
336.1 |
379.7 |
396.7 |
320.7 |
Source: the RK NEM Statistics Committee
Analysis of the balance of resources and use of cotton shows that from 2003 to 2014 there is a decrease in all indices Volume of cotton plant production decreased from 400 thou. tons in 2003 to 320 thou. tons in 2014. All produced cotton plants are processed in the Republic of Kazakhstan.
Table 36.Balance of resources and use of cotton plants in 2003-2014, thou. tons
Index |
2003 |
2004 |
2005 |
2006 |
2007 |
2008 |
2009 |
2010 |
2011 |
2012 |
2013 |
2014 |
Production |
403 |
467 |
465 |
435 |
442 |
318 |
270 |
240 |
336 |
380 |
397 |
321 |
Imports |
0.04 |
0.01 |
0 |
0 |
||||||||
Exports |
0.6 |
0.3 |
0.05 |
1.5 |
2.6 |
|||||||
Domestic use |
403 |
467 |
465 |
435 |
441 |
318 |
270 |
240 |
336 |
380 |
395 |
318 |
Source: RK NEM Statistics Committee, RK MF State Revenue Committee
Oil crops
Kazakhstan soybeans are mainly exported to the CIS countries, however, half of the total export volume was accounted for by Sweden in 2013. Export volume of soybeans increased almost tenfold over the past ten years.
Table 37.Export volume of soybeans by countries, tons
Country |
2003 |
2004 |
2005 |
2006 |
2007 |
2008 |
2009 |
2010 |
2011 |
2012 |
2013 |
2014 |
Sweden |
|
1,551 |
10,480 |
10,812 |
||||||||
Uzbekistan |
1,188 |
2,244 |
691 |
1,364 |
2,665 |
4,595 |
724 |
3,667 |
3,932 |
6,149 |
||
Tajikistan |
712 |
1,594 |
1,600 |
|||||||||
Kyrgyz Republic |
12 |
1,524 |
3,946 |
4,411 |
4,110 |
1,380 |
||||||
Netherlands |
2,503 |
9,936 |
||||||||||
Other countries |
0 |
159 |
24 |
18 |
0 |
0 |
3,883 |
81 |
0 |
1,605 |
368 |
0 |
TOTAL |
1,200 |
2,403 |
715 |
1,382 |
2,665 |
4,595 |
3,883 |
2,330 |
6,449 |
21,882 |
20,484 |
19,940 |
Source: RK MF State Revenue Committee
Rapeseed in Kazakhstan is an export-oriented culture. Therefore, in 2014, the export of rapeseed significantly increased and amounted to 127 thou. tons. Main rapeseed importing countries from Kazakhstan are Belgium, Latvia and Denmark, which share in the total export volume was 63%.
Table 38. Export volume of rape seeds by countries, tons
Country |
2003 |
2004 |
2005 |
2006 |
2007 |
2008 |
2009 |
2010 |
2011 |
2012 |
2013 |
2014 |
Turkey |
|
823 |
1,070 |
1,777 |
3,611 |
7,485 |
36,166 |
|||||
Iran |
0 |
0 |
478 |
2,472 |
298 |
25,633 |
||||||
Latvia |
11,059 |
14,487 |
12,434 |
20,346 |
8,131 |
3,434 |
11,044 |
19,630 |
23,787 |
|||
Belgium |
|
180 |
28,014 |
15,386 |
||||||||
Russia |
|
0 |
0 |
0 |
3,977 |
6,281 |
0 |
1,416 |
12,296 |
8,568 |
9,602 |
6,779 |
Poland |
|
|
|
594 |
583 |
|
|
|
|
140 |
3,755 |
4,860 |
Germany |
0 |
|
0 |
11,696 |
706 |
0 |
0 |
13,959 |
2,587 |
5,583 |
4,771 |
3,889 |
Finland |
|
|
|
1,100 |
2,054 |
14,555 |
6,888 |
|
|
6,588 |
7,843 |
3,100 |
United Kingdom |
|
|
|
|
|
|
|
|
|
|
|
2,000 |
Tajikistan |
|
|
|
|
872 |
|
998 |
|
|
320 |
809 |
1,520 |
Denmark |
3,000 |
721 |
3,537 |
2,805 |
8,950 |
1,211 |
33,831 |
30,358 |
14,185 |
1,510 |
||
Other countries |
0 |
0 |
0 |
5,181 |
7,933 |
6,486 |
4,743 |
1,508 |
20 |
105 |
1,179 |
2,926 |
TOTAL |
0 |
0 |
3,000 |
30,350 |
34,971 |
43,633 |
42,402 |
30,654 |
52,168 |
66,315 |
97,570 |
127,558 |
Source: RK MF State Revenue Committee
At the present day, Kazakh flax is mainly exported to the EU countries. Among them, there are five largest importers of Kazakh flax – Belgium, Germany, Poland, Netherlands, and Latvia.
Table 39. Export volume of oil flax by countries, tons
Country |
2006 |
2007 |
2008 |
2009 |
2010 |
2011 |
2012 |
2013 |
2014 |
Belgium |
4,336 |
14,520 |
14,746 |
51,965 |
131,940 |
61,177 |
71,480 |
||
Germany |
0 |
0 |
0 |
241 |
3,954 |
11,511 |
21,874 |
18,979 |
42,485 |
Latvia |
3,981 |
360 |
7,906 |
27,472 |
13,045 |
37,596 |
|||
Afghanistan |
246 |
1,305 |
1,159 |
0 |
30,763 |
9,300 |
3,148 |
21,202 |
|
Netherlands |
|
|
|
7,107 |
|
7,192 |
7,028 |
13,340 |
19,067 |
Poland |
|
0 |
|
|
0 |
271 |
4,078 |
14,071 |
14,786 |
Russia |
0 |
0 |
0 |
0 |
0 |
14 |
611 |
479 |
13,562 |
Denmark |
295 |
|
|
|
|
|
12,971 |
1,688 |
11,574 |
Turkey |
|
|
|
|
|
|
6,651 |
8,109 |
10,120 |
Uzbekistan |
|
|
|
|
|
400 |
3,464 |
3,910 |
3,960 |
Iran |
187 |
845 |
1,412 |
2,728 |
|||||
Other countries |
0 |
64 |
0 |
314 |
100 |
729 |
5,060 |
2,967 |
3,545 |
TOTAL |
295 |
4,646 |
5,286 |
23,701 |
26,706 |
103,032 |
231,294 |
142,325 |
252,104 |
Source: RK MF State Revenue Committee
1.4. Historical background on the development of industry.
At the time of obtaining independence in 1991, the leading position in Kazakhstan GDP was occupied by agriculture branch, whose share in GDP of the country amounted to 30.7%, and the share of industry in GDP was 28.3%. Relative share of the branches of construction, trade, transport and communications was much lower and amounted to 9.6%, 8.5% and 7.8% respectively.
Table 40.Structure of gross domestic product by branches in 1991, in %
Branch |
Relative share of the branch in GDP of the country |
Agriculture |
30.7% |
Industry |
28.3% |
Construction |
9.6% |
Trade |
8.5% |
Transport and communications |
7.8% |
Other services |
15.1% |
Total |
100% |
Source: Prepared on the basis of statistical data of the USSR
In the gross social product of the Kazakh SSR in 1989, the relative share of industry was 45%, of agriculture - 25%, of construction - 15%, and the rest was accounted for by other branches of the national economy. 4.5% of the gross social product of the USSR was accounted for the share of the Kazakh SSR. Relative share of agriculture of the Kazakh SSR was 6.5% in the gross social product of agriculture in the USSR.
Table 41.Gross social product (GSP) by branches of the national economy of the Kazakh SSR in the USSR in 1989
Branch |
GSP of the Kazakh SSR |
GSP of the USSR |
Share of the Kazakh SSR GSP in the USSR GSP, % |
||
bln. rub. |
% |
bln. rub. |
% |
||
Agriculture |
18.1 |
25% |
276.7 |
17% |
6.5% |
Industry |
32.3 |
45% |
943.5 |
59% |
3.4% |
Construction |
11.1 |
15% |
173.6 |
11% |
6.4% |
Transport and communications |
5.0 |
7% |
72.7 |
5% |
6.9% |
Trade, intermediates, logistics and other branches |
5.0 |
7% |
127.0 |
8% |
3.9% |
Total |
71.5 |
100% |
1,593.5 |
100% |
4.5% |
Source: Prepared on the basis of statistical data of the USSR
Gross agricultural output of the Kazakh SSR in 1985 was 13.8 bln. rubles. Larger relative share (57.5%) accounted for livestock products, and the share of crop products was 42.5% in the structure of the gross output of agricultural products.
In 1985, the Kazakh SSR ranked third in the USSR by volume of the gross output of agricultural products. Share of the Kazakh SSR was 6.6% in the volume of gross output of agricultural products.
Table 42.Share of the gross output of Kazakh SSR agricultural products in the gross output of USSR agricultural products in 1985
Branch |
Kazakh SSR agricultural products |
USSR agricultural products |
Share of the Kazakh SSR agricultural products in the USSR, % |
||
mln. rub. |
% |
mln. rub. |
% |
||
Crop farming |
5,878 |
42.5% |
92,885 |
44.5% |
6.3% |
Livestock farming |
7,954 |
57.5% |
115,728 |
55.5% |
6.9% |
Total |
13,832 |
100% |
208,600 |
100% |
6.6% |
Source: statistical compendium "Agriculture of the USSR", 1988
The Kazakh SSR was one of the breadbasket in the USSR: it played an especially big role in the production of wheat. 12.6% of grain crop production and more than 19% of wheat production accounted for the share of this country in 1985.
Table 43.Production of main types of agricultural products in the Kazakh SSR, and their share in the total production volume of the USSR in 1985
Products |
Production volume in the Kazakh SSR, thou. tons |
Production volume in the USSR, thou. tons |
Share of the Kazakh SSR in the total production volume of the USSR, % |
Cereals, including: |
24,164 |
191,674 |
12.6% |
wheat |
15,108 |
78,078 |
19.3% |
Potatoes |
2,197 |
73,009 |
3.0% |
Sugar beet |
1,901 |
82,392 |
2.3% |
Vegetables |
1,085 |
28,050 |
3.9% |
Raw cotton |
305 |
8,755 |
3.5% |
Fruits and berries |
231 |
10,539 |
2.2% |
Grapes |
152 |
5,751 |
2.6% |
Sunflower |
93 |
5,260 |
1.8% |
Source: statistical compendium "Agriculture of the USSR", 1988
Kazakhstan was one of the major grain producers in the Soviet Union. 2,140 state farms (sovkhozes) and 388 collective farms (kolkhozes) were in the Republic of Kazakhstan in 1985. Almost all state and collective farms were diversified. Country has become one of the leading regions for grain production in the USSR (24.2 mln. tons in 1985) with the development (1954-1960, 25.5 mln. ha) of virgin and fallow lands.
Production volume of cereals, including wheat, amounted to only 13.3 mln. tons in 1991 according to RK NEM Statistics Committee data on the output of agricultural products in kind for the period of 1991–2014. High growth rates of cereal production were noted in subsequent years, which led to a reduction in the production of other crops, and therefore a policy of diversification of wheat plantings to oil-bearing, legume and other crop plantings is currently conducted.
Output of oil-bearing crops, cotton plants, vegetables and potatoes significantly increased compared with 1991, while the figures for oil-bearing crops also exceeded production figures of the Kazakh SSR.
Growing of cereal crops and oil-bearing seeds
To date, the main regions for production of oil-bearing crops are six regions of the country: Akmola, Almaty, East Kazakhstan, Kostanay, Pavlodar and North Kazakhstan regions. These regions include 2 mln. ha of oil-bearing planting acreages from the common 2.3 mln. ha across the country, that is, 87% of production. As compared to the Soviet period, Kazakhstan significantly increased its production of oil-bearing crops from 266 thou. ha in 1990 to current 2.3 mln. ha of oil-bearing crops. 98% of all the oil-bearing crops are accounted for by 5 major crops: sunflower, flax, rapeseed, safflower, and soybeans. It should be noted that the northern and eastern regions of the country are more specialized in the production of sunflower, flax, and rapeseed, while the south of the country is specialized in the production of soybeans and safflower. In the USSR, the sunflower was dominated in the territory of Kazakhstan. Such a growth in the production volumes of oil-bearing crops is associated primarily with the high profitability of oil-bearing crops, the presence of steady rising sales market and public policy in the field of agriculture complex aimed at the diversification of crop farming, the retreat from a monoculture, and the significant subsidization of oil-bearing crop production.
Grain
The current specialization of grain-planting and grain-processing regions corresponds to the historical, which is associated with the invariability of climatic factors on the time interval under review.
Growing of cereal crops and oil-bearing seeds, and processing of raw materials and production of fat-and-oil products
In 2014, 29% of sunflower produced in Kazakhstan were exported. For the period from 2003 to 2014 there was a sharp jump in exports of more than 373 tons to 147 thousand tons. Main importing countries of Kazakh products are the CIS countries and China.
Table 44.Export volume of sunflower seeds by countries, tons
Country |
2003 |
2004 |
2005 |
2006 |
2007 |
2008 |
2009 |
2010 |
2011 |
2012 |
2013 |
2014 |
Uzbekistan |
|
1 |
127 |
512 |
0 |
840 |
4,045 |
2,317 |
34,417 |
47,801 |
72,090 |
|
China |
15 |
200 |
1,523 |
2,259 |
0 |
1,297 |
3,120 |
1,982 |
60,764 |
|||
Iran |
120 |
0 |
10 |
4,369 |
||||||||
Tajikistan |
|
838 |
0 |
180 |
585 |
1,605 |
1,312 |
4,077 |
||||
Turkey |
99 |
1,512 |
69 |
161 |
462 |
299 |
520 |
2,833 |
0 |
0 |
882 |
1,288 |
Afghanistan |
|
114 |
655 |
420 |
79 |
1,152 |
||||||
Kyrgyz Republic |
181 |
571 |
257 |
1,249 |
1,010 |
|||||||
Poland |
0 |
0 |
61 |
161 |
861 |
|||||||
Mongolia |
|
475 |
||||||||||
Russia |
187 |
79 |
109 |
3 |
0 |
111 |
749 |
128 |
68,596 |
226 |
457 |
|
Other countries |
259 |
250 |
237 |
252 |
236 |
0 |
260 |
589 |
4 |
994 |
45 |
503 |
TOTAL |
373 |
2,150 |
505 |
2,172 |
4,310 |
299 |
3,143 |
12,352 |
4,025 |
106,019 |
53,658 |
147,046 |
Source: RK MF State Revenue Committee
2. Number of enterprises (players) in the market.
Kazakhstan Statistics Committee does not publish a trend of the number of enterprises by sectors and regions.
The number of agricultural producers in the agriculture of Kazakhstan increased by 1.5 times for the period since 2003.
Table 45. Number of agricultural enterprises in the Republic of Kazakhstan at the end of the year, pieces
Year |
Registered |
Operating |
2003 |
159,433 |
126,212 |
2004 |
187,139 |
152,527 |
2005 |
196,417 |
161,962 |
2006 |
200,812 |
173,132 |
2007 |
201,890 |
174,608 |
2008 |
201,072 |
174,651 |
2009 |
200,876 |
175,636 |
2010 |
197,033 |
176,822 |
2011 |
214,008 |
188,616 |
2012 |
197,431 |
172,821 |
2013 |
200,665 |
189,930 |
2014 |
202,031 |
191,524 |
Change of 2014 to 2003,% |
126.7 |
151.7 |
Source: According to data of the RK NEM Statistics Committee
The share of SMEs is on average 75% in the agriculture of Kazakhstan as a whole. Average share of SMEs in the crop farming is 63%. The share of SMEs for 12 years varied by no more than 4-5%.
Table 46. Trend of the gross output of crop products, and share of peasant farms and household plots, %
Year |
Total output of products, mln. tenge |
Share of peasant farms and household plots, % |
2003 |
351,449 |
66.7 |
2004 |
391,249 |
62.4 |
2005 |
400,218 |
61.8 |
2006 |
432,492 |
59.7 |
2007 |
630,796 |
58.3 |
2008 |
761,117 |
56.2 |
2009 |
936,850 |
59.2 |
2010 |
662,653 |
70.6 |
2011 |
1,337,194 |
56.9 |
2012 |
981,190 |
70.6 |
2013 |
1,313,004 |
66.2 |
2014 |
1,327,855 |
68.5 |
Source: According to data of the RK NEM Statistics Committee
3. Barriers and restrictions
The matrix of barriers in plant and food processing industry is given in the table below.
Table 47. A matrix of problems and barriers in plant and food processing industry
Name |
Grain processing products |
Fat-and-oil products |
Fruit and vegetable processing products |
||
noncompetitiveness at the price |
lack of raw materials |
|
v |
v |
|
high rates for services |
v |
v |
v |
||
expensive imported containers |
|
v |
v |
||
low availability to financial assets |
high debt ratio |
v |
v |
v |
|
high rates |
v |
v |
v |
||
failure of long-term lending |
v |
v |
v |
||
imperfection of the taxation |
the first VAT |
|
|
v |
|
personal income tax |
|
|
v |
||
VAT relief to everyone |
|
|
|
||
corporate income tax relief at renewal of fixed capital |
v |
v |
v |
||
VAT recovery at export |
v |
v |
v |
||
restriction of sales function |
in the domestic market |
falsification |
|
v |
v |
low-balling |
|
|
|
||
informal fees in trade |
|
|
v |
||
failure of logistic infrastructure |
v |
v |
v |
||
duration of procedures of taking measures in customs tariff regulation |
v |
v |
v |
||
failure of feed culture |
v |
v |
v |
||
in the foreign market |
trade barriers |
v |
v |
|
|
failure of logistic infrastructure |
v |
|
|
||
problems of institutional development |
failure of authentic statistics PEI |
v |
v |
v |
|
deficit of subject specialists in industries |
v |
v |
v |
||
failure of separate authorized body for processing of all agriculture raw materials and production of food products |
v |
v |
v |
4. List of potential opportunities for entrepreneurial initiatives.
Implementation of region specialization will allow considerably to add value of AIC (agro-industrial complex), due to rational use both resources, and logistics. In some districts irrational production of agriculture cultures, breaking scientifically based crop rotations, exhausting land resources and not using fully resource potential, is performed. So in some districts of the Aktobe, West Kazakhstan, East Kazakhstan, Karaganda, Kostanay, Pavlodar and South Kazakhstan regions the reorientation of wheat crop area for production of forage crops is necessary. Productivity in these regions is lower than average in republic because of droughty climate. Also reorientation of wheat crop areas has been recommended in 4 districts of Almaty region despite high crop yield. It is caused by agro-climatic opportunities of cultivation of more commercially viable and economically advantageous cultures, such as grain maize, soya bean, etc. which, however, require investments and knowledge of market penetration technologies.
Production of soya bean is not recommended in north regions, where crop yield is three times lower than average yield in republic due to some disadvantages:
• The short crop season - often recurring late-spring and early-autumn chills reduce the freeze-free period to 80 days, when minimum standard rates for soya bean - 90 days;
• Low level of rainfall – less than 250 mm. during cultivation;
• Risks of droughts and floods.
These factors restrict of soybean cultivation due to economical inexpedience and risky production.
In separate districts of the Akmola region according to the scheme of specialization it is reasonable to refuse cultivation of low-yielding potatoes and vegetables because of the salted and solonetzic soils of hard-loamy structure, and also failure of the irrigated lands. In the Aktobe, Atyrau, East Kazakhstan, Kyzylorda regions the districts on potato and vegetable production have been excluded from the scheme of specialization because of negative environmental situation and pollution of land resources
Due to restrictions of scientifically based crop rotation maintenance the recommendations about cutback in production of sunflower in the East Kazakhstan, Almaty regions and about an exception from scheme of specialization the sunflower production in 3 districts of the Kyzylorda region have been given.
Considering prevalence of the alkali soil, high daily mean temperatures of the crop season the economical inexpedience of apple gardens and vinelands lay-out in the Kyzylorda region has been proved.
5. SWOT- analysis of an industry sector.
Grain and oil seed growing
Table 48. SWOT-analysis of oil-plant production
Strengths |
Weaknesses |
· Home-produced oil crops are free from GMO (genetically modified organisms), contain the minimum allowed quantity of pesticides, do not contain other chemical agents; · Quality of oil crops meets world standards; · Low cost price of oil crop production.
|
· Low crop yield in comparison with other countries competitors; · Shortage of skilled personnel in an industry sector; · Considerable amortization of agricultural equipment or failure of specialized machinery for cultivation of oil crops; · Mass use of low-quality seed; · Failure of system production promotion in the market. |
Possibilities |
Threats |
· Market availability from the countries of the European Union; · Opening of emerging markets (Iran, China) · Increase of exports by newly built logistic infrastructure objects; · Increase of oil crop production due to use of intensive technologies and diversification in plant production. |
· Exhaustion of agriculture properties for production of oil crops; · Rise in price of production owing to increase in prices for energy carriers, chemicals, labour; · In a crop rotation separate types of oil crops should return to the field not earlier than in 6-7 years, that can cause the reduction of crop areas; · The competition from Russia, Belarus, Ukraine. |
Source: Expert assessment
Table 49. SWOT – analysis of grain cultivation industry sector in Kazakhstan
Strengths |
Weaknesses |
· Producers – large agricultural organizations; · Availability of the large areas of land resources; · Fitting of the enterprises with modern high-production equipment.
|
· Low marketing of the output; · Insufficient level of production efficiency; · Low financial self-sufficiency and overexposure from the government support; · Shortage of skilled personnel.
|
Possibilities |
Threats |
· Implementation of more efficient systems of goods distribution, opening of modern export directions owing to development of transport and logistic infrastructure, diversification of the markets will allow to sell more efficiency productions at a more favourable prices; · Modern financial crisis and the operating mechanisms of manufacturing facilities redistribution will allow to clear an industry sector from ineffective management; · Fitting of the enterprises with modern high-production equipment will make the producer less dependent from mass of skilled personnel.
|
· The competition from the countries of the Customs Union; · The production risks connected with an arrangement of the enterprises in a zone of risky agriculture; · Volatility of the prices for grain crops; · The risk of financial crisis second wave can cut off national producer from the financial resources necessary for modernization completion; · The exchange risks retransmitted in economy are implemented owing to carrying out of devaluation; · Great drop of subsidization totals. |
Source: Expert assessment
Tomatoes
Table 50. SWOT- analysis of tomato production
Strengths |
Weaknesses |
· Availability of advantageous environmental conditions for cultivation of tomatoes south-east of country; · Geographical proximity of raw material sources and processers; · Availability of potential production; · The stable domestic demand stimulates producers to expansion. |
· Poor management of crop enterprises; · Incompliance with agriculture technologies; · Low crop yield and as a result higher production cost; · High degree of worn-out state of agricultural equipment at SHTP; · Shortage of current assets.
|
Possibilities |
Threats |
· Increase in yield up to 3 times due to use of intensive technologies at tomato cultivation; · Tomato reduction costs due to increase in tomato gross yield.
|
· Traditional risks of plant production; · Rise in price of production owing to increase in prices for energy carriers, POL (petroleum, oil and lubricants), fertilizers, labour; · The competition from China.
|
Source: Expert assessment
Production and processing of fruits (production of apples)
Table 51. SWOT- analysis of apple production (intensive industrial garden)
Strengths |
Weaknesses |
· The most favourable in the world the agroclimatic conditions for apple gardens – in the foothills of Ala Tau the belt of wild-growing apples (Malussieversii), being the parent of the cultivated apple majority, is located; · Historically formed connections with the Russian Federation in export of apples to the Siberian region; · Availability of the government support of an industry sector.
|
· Deficit of high-quality planting material owing to restriction of the stock nursery assortment, built-in 30-40 years ago; · A high capital cost of intensive gardens in comparison with traditional gardens; · Shortage of skilled personnel.
|
Possibilities |
Threats |
· Import substitution of eating apples and imported apple juice concentrates; · Reduction costs due to intensive technologies of agriculture; · Export of eating apples to the Siberian region of Russia, which is the largest importer of apples in the world.
|
· A yield loss due to late chills 1 time in 3-4 years; · Loss of plantings due to implementation of pest risks; · Reducing of land areas, suitable for gardens due to civil engineering; · Climate change and environmental pollution.
|
Source: Expert assessment
Cultivation of sugar beet
Table 52. SWOT- analysis of sugar beet production
Strengths |
Weaknesses |
· Availability of advantageous environmental conditions for cultivation of sugar beet south-east of country; · Availability of potential production; · Vast experience of culture cultivation.
|
· Small marketability of production; · Low indicators of yield, sugariness of sugar beet and sugar recovery from 1 hectare of beet crops in comparison with other countries; · High degree of worn-out state of agricultural equipment; · Lack of funds at goods producers for purchase of plant protection products and mineral fertilizers; · Low vertical cooperation between beet producers and processing plants; · Low profitability of sugar beet production. |
Possibilities |
Threats |
· Increase in crop areas of sugar beet and growth of yield; · Increase of mechanization level; · Creation of protective measures for sustainable development of an industry sector; · Change of measures and mechanisms of the government support; · Increase of purchase prices for sugar beet. |
· Loss of beet grower interest in its production; · Increase in resource intensity and import dependence of sugar beet growing (import beet seeds, plant protection products, beet equipment); · Considerable import volumes of cane raw sugar; · Run-off of sugar beet production taking into account low profitability of an industry sector.
|
Source: Expert assessment
Cotton raw processing
Table 53. SWOT- analysis of a cotton plant production
Strengths |
Weaknesses |
· Advantageous environmental conditions for cultivation of cotton plant south of country; · Geographical proximity of raw material sources and processers; · Availability of potential production; · Availability of uncultivated crop areas for cotton plant crop.
|
· Low crop yield in comparison with other countries competitors; · Shortage of funds for technology implementation (progressive planting methods, crop tending, irrigation methods, including pest and cotton disease control) · Shortage of skilled personnel in an industry sector; · Outdated equipment; · Use of low-quality seed.
|
Possibilities |
Threats |
· Increase in yield by implementation of modern methods and technology; · Increase of exports in Russia.
|
· Rise in price of production owing to increase in prices for energy carriers, chemicals, labour; · Reducing of cotton plant crop areas; · The competition from Uzbekistan, Tajikistan in cotton plant production.
|
Source: Expert assessmentf
Review on livestock farming
1. Introduction.
Agro-industrial complex of Kazakhstan is a priority for the state. One of the most important factors, providing sustainable development of agriculture, is the orientation on production efficiency and agricultural products processing, which involves reasonable and integrated use of land, labor, material and primary resources, a special role is assigned to sustainable development of the territorial aspect, contributing to more efficient use of basic kinds of resources.
The main directions in livestock farming, which accounts for 48% of gross agricultural output, are beef cattle and dairy cattle breeding, sheep and horse breeding, poultry meat production. Cattle are mainly bred in the northern part of the country, as well as in the foothills of South and East Kazakhstan. Sheep breeding is more developed in the south and west of the country, as well as in the east, where there are vast pasture areas in all seasons. Horse breeding is developed in all regions of the country.
The first part of this review is a description of the contribution of the sector and the structure of Kazakhstan agriculture, then the internal market on livestock farming, historical background of sector development, existing barriers and limitations are examined, and the list of potential opportunities for entrepreneurial initiatives is given.
1.1. Industry contribution to the economy.
In 2014 the gross output of agricultural products amounted to 2.5 trillion tenge, the livestock farming accounted for 48% of gross agricultural output or 1.1896 trillion tenge. Since 2003 the gross output of livestock products has increased 4.6 times.
Picture 1. The gross output of agricultural and livestock products during the period of 2003-2014, mln. tenge in current prices
Source: according to the Statistics Committee of the MNE of RK
(Gross output (servicing) in agriculture
Gross output in livestock farming)
The main directions in livestock farming, which accounts for 48% of gross agricultural output, are beef cattle and dairy cattle breeding, sheep and horse breeding, poultry meat production. Cattle are mainly bred in the northern part of the country, as well as in the foothills of South and East Kazakhstan. Sheep breeding is more developed in the south and west of the country, as well as in the east, where there are vast pasture areas in all seasons. Horse breeding is developed in all regions of the country.
During the period of 1991-2014 the output of products in the livestock farming, except for meat production, had the most stable character and provided internal needs of the country.
Current meat production is far behind the performance of the Soviet period, at the same time the process of industry restoring should be noted in recent years. During the period of 1991 – 2014 the meat production decreased 1.7 times.
Table 1. The output of main agricultural products in volume terms, thous. tons
Products |
1991 |
1992 |
2013 |
2014 |
Meat |
1 524 |
1 257 |
871 |
900 |
Milk |
5 555 |
5 265 |
4 930 |
5 068 |
Eggs, mln. units |
4 075 |
3 565 |
3 896 |
4 291 |
Source: according to the Statistics Committee of the MNE of RK
1.2. Structure of the sector.
The gross output of agricultural products in the Republic of Kazakhstan amounted to 2.5 trillion tenge in 2014. In terms of value the manufacture of livestock products was 47.5%. The largest share in the cost of livestock products output involves: dairy breeding - 15%, cattle breeding - 14% and breeding of small cattle - 6%.
Table 2. The structure of agricultural production in the Republic of Kazakhstan in 2014
Production |
Output of products, mln. tenge |
In % of total |
Total agricultural products |
2 527 890 |
100% |
Crop products |
1 327 855 |
52.5% |
Livestock products |
1 189 555 |
47.5% |
Breeding of dairy cattle |
377 158 |
14.9% |
Breeding of other cattle and buffalos |
355 319 |
14.1% |
Breeding of horses and other hoofed animals |
111 081 |
4.4% |
Breeding of camels |
11 089 |
0.4% |
Breeding of ships and goats |
155 722 |
6.2% |
Breeding of pigs |
58 954 |
2.3% |
Poultry breeding |
112 345 |
4.4% |
Breeding of other animals |
7 888 |
0.3% |
Source: according to the Statistics Committee of the MNE of RK
The number of cattle in agricultural organizations increased by 34% in 2014 when compared to 2012 and amounted to 2 116.3 thousand animals, sheep and goats increased by 14.3% (7 031.0 thous. animals), horses - by 29.4% (897.9 thous. animals), camels - by 16.3% (74.9 thous. animals), poultry – by 12.6% (23.3 mln. animals).
It should be noted that during 2014 the part of cattle in organized farms amounted to 35.1%, in private subsidiary farms - 64.9% respectively. For comparison at the beginning of 2010 the part of cattle in organized farms amounted to 18% on average in the republic, in private subsidiary farms - 82% respectively.
The proportion of cattle stock has increased from 5.6% to 9.8% over the last 5 years. At the same time the part of cattle stock of meat productivity in the total number of beef cattle was 18.6% in 2014.
As of August 1, 2015 when compared to the same date of the previous year the number of horses increased by 8.2% in all households in the country and amounted to 2 228.9 thousand animals, cattle - by 2.4% (6969.8 thousand animals), sheep and goats – by 0.9% (22 145.8 thousand animals), poultry of all kinds - by 6% (39 330.4 thousand animals).
During 8 months of 2015 the production of meat increased by 2.9% and amounted to 474.4 thous. tons, the production of milk - by 2.3% (3 138.7 thous. tons), chicken eggs - by 12.7% (2 742 million units).
In the ranking of monetary volume of production the second most important branch of agriculture in 2014 was the breeding of dairy cattle and other cattle, their share amounted to 15% and 14%.
Table 3. The rating of production in monetary terms according to the branches of agriculture
Branch of agricultural industry |
2013 |
2014 |
||
mln. tenge |
in % of total |
mln. tenge |
in % of total |
|
Total |
2 386 103 |
100 |
2 527 890 |
100 |
Breeding of dairy cattle |
333 629 |
14.0 |
377 158 |
14.9 |
Breeding of other cattle |
328 427 |
13.8 |
355 319 |
14.1 |
Breeding of ships and goats |
147 158 |
6.2 |
155 722 |
6.2 |
Poultry breeding |
91 513 |
3.8 |
112 345 |
4.4 |
Breeding of horses |
96 336 |
4.0 |
111 081 |
4.4 |
Source: according to the Statistics Committee of the MNE of RK
19% (1605 thous. people) of all working population in the country was employed in the agricultural sector in 2014. The main part falls on the self-employed population - 70% (1145 thous. people) of farm workers.
Table 4. The number of farm workers in 2014
Factors |
Number (thous. people) |
Working population |
1 605 |
Hired workers |
461 |
Self-employed population |
1 145 |
Source: according to the Statistics Committee of the MNE of RK
Labor productivity in agriculture has increased more than 7 times during the period since 2003. The greatest increase in productivity was in 2011 (50%) and in 2014 (37%).
Picture 2. Labor productivity in agriculture, thous. tenge per capita
Source: according to the Statistics Committee of the MNE of RK
Over the period from 2008 to 2014 the investment in fixed capital in the sector of agriculture of the Republic of Kazakhstan increased by 123% - from 78 to 173 billion tenge. Agricultural GDP increased by 101% from 853 to 1718 trillion tenge during the same period. Thus, the investment growth rate surpassed GDP growth of agricultural sector. The annual equity contribution to GDP of agricultural sector ranged between 7-10% over the mentioned period (see the table below).
Table 5. GDP and investments in the agricultural sector of the Republic of Kazakhstan in 2008-2014, bln. tenge
Name |
2008 |
2009 |
2010 |
2011 |
2012 |
2013 |
2014 |
Growth 2008-14 |
Agricultural investment |
78 |
78 |
84 |
109 |
134 |
140 |
173 |
123% |
Agricultural GDP |
853 |
1 045 |
984 |
1 409 |
1 330 |
1 621 |
1 718 |
101% |
Equity contribution to agricultural GDP |
9% |
7% |
8% |
8% |
10% |
9% |
10% |
1% |
Source: according to the Statistics Committee of the MNE of RK
Equity contribution to the agricultural sector in the total volume of investment in fixed capital in the Republic of Kazakhstan has been growing progressively since 2011. However, agricultural investment in relative terms is still below the contribution, made by this sector to the total GDP of the country (see the picture below).
Picture 3. The share of agricultural sector in terms of investments in the fixed capital and the GDP of the Republic of Kazakhstan in 2008-2014, in percentage
Source: according to the Statistics Committee of the MNE of RK.
(Share of agricultural sector in investments in the fixed capital of RK
Share of agricultural sector in the GDP of RK)
Information analysis about investment sources shows that the largest equity contribution - over 70% of the total amount of investment in agricultural sector falls on own resources of entrepreneurs. The share of borrowed funds accounts for about 25%.
Table 6. The structure of investments in agricultural sector according to the sources of formation in 2009-2014, bln. tenge
Name |
2009 |
2010 |
2011 |
2012 |
2013 |
2014 |
Share, % |
Investments in fixed assets, incl.: |
77.5 |
83.6 |
109.4 |
133.9 |
139.6 |
173.3 |
100.0 |
Own funds of entrepreneurs |
54.4 |
46.3 |
80.1 |
103.6 |
105.8 |
132.3 |
72.8 |
Borrowed funds |
18.3 |
35.1 |
25.2 |
28.2 |
30.9 |
38.5 |
24.6 |
funds of the republican budget |
3.5 |
1.7 |
1.0 |
0.7 |
2.7 |
2.1 |
1.6 |
funds of the local budget |
1.3 |
0.5 |
1.3 |
0.1 |
0.3 |
0.5 |
0.5 |
Foreign investments |
0.0 |
0.0 |
1.9 |
1.3 |
0.0 |
0.0 |
0.4 |
Source: according to the Statistics Committee of the MNE of RK
Foreign investments in the agricultural sector of the Republic of Kazakhstan were registered only in 2011-2012, their share did not exceed 2%. Foreign investments were made only in Akmola and South Kazakhstan regions. In other regions of the Republic of Kazakhstan the foreign investments in the agricultural sector were not conducted. The share of local investments was 98% in 2011, and 99% in 2012.
Table 7. The share of local agricultural investments in Kazakhstan in 2008-2014, billion tenge
Name |
2008 |
2009 |
2010 |
2011 |
2012 |
2013 |
2014 |
Growth 2008-14, % |
Investments in RK, incl.: |
77.8 |
77.5 |
83.6 |
109.4 |
133.9 |
139.6 |
173.3 |
123 |
- local |
77.8 |
77.5 |
83.6 |
107.5 |
132.6 |
139.6 |
173.3 |
123 |
- foreign |
0.0 |
0.0 |
0.0 |
1.9 |
1.3 |
0.0 |
0.0 |
0 |
The share of local investments, % |
100 |
100 |
100 |
98 |
99 |
100 |
100 |
0 |
Source: according to the Statistics Committee of the MNE of RK
In 2014 the foreign trade turnover of the Republic of Kazakhstan amounted to 119450.6 mln. US dollars and it decreased by 10.5% when compared to 2013, including export – 78237.8 mln. US dollars (less by 7.6%), import – 41212.8 mln. US dollars (less by 15.6%).
Table 8. The structure of export and import in the Republic of Kazakhstan according to the main commodity lines in 2014
Custom commodity code |
Name of the commodity group |
export |
import |
||
mln. US dollars |
in % of total |
mln. US dollars |
in % of total |
||
Total |
79459.8 |
100.0 |
41295.5 |
100.0 |
|
01-24 |
Products of animal and vegetable origin, including finished food products |
2637.7 |
3.3 |
4335.9 |
10.5 |
Source: according to the Statistics Committee of the MNE of RK, the State Revenue Committee of the MF of RK
In 2014 exports to Russia amounted to 5178.1 mln. US dollars (less by 11.9% when compared to 2013), imports – 13730.3 mln. US dollars (less by 23.6%). Imported agricultural and food products amounted to 1612 mln. US dollars, it was mostly dairy products, bakery confectionery products, tobacco and so on.
In 2014 exports to the Republic of Belarus amounted to 29.2 mln. US dollars (less by 49.9% in 2013), imports - 727.6 mln. US dollars (greater by 4.2%). The part of agricultural and food products was 18.3% (more than 40% of this amount accounted for dairy products).
In 2014 exports to China amounted to 9815 mln. US dollars, imports - 7367 mln. US dollars.
In 2014 exports to Kyrgyzstan amounted to 705 mln. US dollars, imports - 351 mln. US dollars. The main volume of exports constituted agro-food products, their part was 39% (cereals, tobacco and tobacco products). Textile products (clothes) with the share of 27% and agro-food products (dairy products, vegetables and fruits) are manly imported.
In 2014 exports to Uzbekistan amounted to 1083 mln. US dollars, imports - 1018 mln. US dollars. The main volume of exports constituted agro-food products, their part was 45.8% (flour, cereals). Agro-food products (vegetables and fruits) with the share of 42% are manly imported.
1.3. Internal market capacity.
Dairy industry
During the period from 2003 to 2014 the annual production of cow's milk in Kazakhstan increased by 17% - from 4278 to 5020 thousand tons, the number of dairy cattle increased by 23% - from 3398 to 4176 thousand animals (see the table below). During the mentioned period the dairy farming has demonstrated an annual steady growth. The exceptions were 2011 and 2012 years, when the decrease in livestock and milk production, associated with the detailing of statistics on the results of animal census, was recorded.
Table 9. Figures of the dairy farming in 2003-2014
Years |
2 003 |
2 004 |
2 005 |
2 006 |
2 007 |
2 008 |
2 009 |
2 010 |
2 011 |
2 012 |
2 013 |
2 014 |
Dairy cattle population, thous. animals |
3 398 |
3 630 |
3 807 |
3 948 |
4 074 |
4 179 |
4 252 |
4 308 |
3 978 |
3 938 |
4 144 |
4 176 |
Including cows, thous. animals |
1 571 |
1 679 |
1 761 |
1 826 |
1 884 |
1 933 |
1 966 |
1 992 |
1 840 |
1 778 |
1 933 |
1 962 |
Average milk yield per one cow, t/year |
3 |
3 |
3 |
3 |
3 |
3 |
3 |
3 |
3 |
3 |
3 |
3 |
Source: according to the Statistics Committee of the MNE of RK
Note: the data of the livestock population in 2003-2011 was received by calculation.
The largest regions of beef production are Almaty region - 16%, East Kazakhstan region - 15% and South Kazakhstan region - 12% of the total volume of beef production in Kazakhstan. At that 77% of beef is produced in small private subsidiary farms, which to a certain extent is the reason for low efficiency of the sector. Regional allocation of cattle is shown in the figure below.
Picture 4. Allocation of cattle stock in the Republic of Kazakhstan in the context of regions
(100 thous. animals
50 thous. animals
1 thous. animals)
The largest regions of lamb production are South Kazakhstan region - 21%, Almaty region – 16%, East Kazakhstan region - 16% and Jambyl region - 11% of the total volume of lamb production in Kazakhstan. At that 76% of lamb is produced in small private subsidiary farms, which to a certain extent is the reason for low efficiency of the sector. Regional allocation of cattle is shown in the figure below.
Picture 5. Allocation of ships in the Republic of Kazakhstan in the context of regions
(50 thous. animals
20 thous. animals
1 thous. animals)
The largest regions of horse meat production are Almaty region - 15%, East Kazakhstan region - 13%, Karaganda region – 10%, and South Kazakhstan region - 10% of the total volume of horse meat production in Kazakhstan. At that 75% of horse meat is produced in small private subsidiary farms, which to a certain extent is the reason for low efficiency of the sector. Regional allocation of cattle is shown in the figure below.
Picture 6. Allocation of horses in the Republic of Kazakhstan in the context of regions
(20 thous. animals
10 thous. animals
1 thous. animals)
The largest regions of pork production are North Kazakhstan region - 18%, Kostanay region – 18%, Almaty region - 12%, and Akmola region - 11% of the total volume of pork production in Kazakhstan. At that 61% of pig meat is produced in small private subsidiary farms, which to a certain extent is the reason for low efficiency of the sector.
The Statistics Committee of the Ministry of National Economy of the Republic of Kazakhstan keeps record of the structure of retail group volume only according to major food groups. The foodstuff accounts for about 1.8 trillion tenge or 29% in retail trade volume. Most foodstuff in the structure of retail trade falls on meat - 16%, a significant share is occupied by dairy products - 10%, fruits and vegetables - 12% and drinks -13.8%. During the period from 2003 to 2014 the volume of foodstuff retail trade has increased 4.3 times. It should be noted that the Statistics Committee of the MNE of RK does not record the structure of retail trade volume in the context of regions.
Table 10. Structure and dynamics of retail trade volume according to certain commodity groups, bln. tenge
Goods |
2004 |
2005 |
2006 |
2007 |
2008 |
2009 |
2010 |
2011 |
2012 |
2013 |
2014 |
Total |
1 219 |
1 409 |
1 737 |
2 093 |
2 443 |
2 551 |
3 197 |
3 866 |
4 568 |
5 474 |
6 332 |
Trade of food products, among them |
419 |
490 |
592 |
689 |
820 |
930 |
1 050 |
1 226 |
1 418 |
1 610 |
1 821 |
Meat, including poultry meat and meat products (with account of sausage products) |
74 |
85 |
113 |
131 |
135 |
156 |
181 |
221 |
255 |
276 |
299 |
in particular: |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
meat, including poultry meat and meat products |
62 |
72 |
99 |
108 |
114 |
132 |
149 |
179 |
205 |
220 |
237 |
sausage products |
12 |
13 |
14 |
23 |
21 |
25 |
32 |
42 |
50 |
56 |
62 |
Source: according to the Statistics Committee of the MNE of RK
During the period from 2005 to 2014 imports of meat (beef, lamb, horse meat and pork) increased 4 times from 7.4 to 29.8 thous. tons. Beef imports increased 3 times, pork - 4.9 times, lamb - 1.7 times, horse meat - 31 times.
Table 11. Imports of meat (beef, pork, lamb, horse meat) to the Republic of Kazakhstan during the period from 2005 to 2014, tons
Products |
2005 |
2006 |
2007 |
2008 |
2009 |
2010 |
2011 |
2012 |
2013 |
2014 |
Beef |
5485 |
13284 |
18843 |
11689 |
6032 |
10404 |
12703 |
22236 |
23904 |
16830 |
Pork |
1614 |
2907 |
4262 |
9074 |
8176 |
7466 |
8861 |
13739 |
11277 |
7928 |
Lamb |
171 |
112 |
35 |
277 |
131 |
63 |
71 |
634 |
757 |
287 |
Horse meat |
154 |
274 |
0 |
2016 |
2755 |
2597 |
3680 |
5981 |
4758 |
4729 |
Total |
7425 |
16578 |
23 139 |
23056 |
17093 |
20530 |
25 316 |
42591 |
40697 |
29774 |
Source: according to the State Revenue Committee of the MF of RK
During the period from 2005 to 2014 exports of meat increased 15.7 times from 224 tons to 3.5 thous. tons, including beef - 2.4 times, pork - 10 times. Export of lamb and horse meat is not performed in 2015.
Table 12. Exports of meat (beef, pork, lamb, horse meat) to the Republic of Kazakhstan during the period from 2005 to 2014, tons
Products |
2005 |
2006 |
2007 |
2008 |
2009 |
2010 |
2011 |
2012 |
2013 |
2014 |
Beef |
115.8 |
21.0 |
- |
399.9 |
22.0 |
- |
18.9 |
- |
265.7 |
2383.4 |
Pork |
108.3 |
75.0 |
- |
- |
22.0 |
- |
260.8 |
144.2 |
59.8 |
1107.9 |
Lamb |
- |
- |
- |
- |
15.9 |
324.5 |
369.4 |
- |
15.5 |
24.8 |
Horse meat |
- |
- |
- |
- |
- |
- |
- |
- |
0.9 |
0.5 |
Total |
224.1 |
96.0 |
- |
399.9 |
59.9 |
324.5 |
649.1 |
144.2 |
342.0 |
3516.6 |
Source: according to the State Revenue Committee of the MF of RK
Despite of the significant growth in own production the increase in imports is also observed in the domestic poultry market in recent years.
According to the Customs Control Committee of the Ministry of Finance of the Republic of Kazakhstan the volume of poultry meat imports to the Republic of Kazakhstan has grown more than twofold over the last ten years, and in 2012 it reached record-breaking 204 thousand tons.
The main supplier of poultry meat to Kazakhstan is the USA, which in 2013 performed 70% of all imports. The United States is followed by Russia and Ukraine with a share of 15% and 11% respectively.
Picture 7. Imports and exports volume of poultry meat over 2003 – 2014, tons
Source: according to the State Revenue Committee of the MF of RK
(Import Export)
Due to the high import dependence of Kazakhstan the exports of poultry meat remain small and over the last five years have not exceeded 1.5 tons. The main export directions are Russia and Kyrgyzstan.
1.4. Historical background of sector development.
At the time of independence attainment in 1991 in the structure of gross domestic product of Kazakhstan the leading position occupied by the agricultural sector, whose proportion in the GDP amounted to 30.7%, the proportion of industry in the GDP amounted to 28.3%. The proportion of sectors of construction, trade, transport and communication was much lower and amounted to 9.6%, 8.5% and 7.8% respectively.
Table 13. The structure of gross domestic products in the country according to the sectors in 1991, %
Sector |
Proportion in the GDP of the country |
Agriculture |
30.7% |
Industry |
28.3% |
Construction |
9.6% |
Trade |
8.5% |
Transport and communication |
7.8% |
Other services |
15.1% |
Total |
100% |
Source: according to the statistical data of the USSR
In the structure of the gross domestic product of Kazakh SSR in 1989 the proportion of industry was 45%, agriculture - 25%, construction - 15%, the rest was accounted for other sectors of economy. The share of Kazakh SSR was 4.5% of the gross social product of the USSR, the share of agriculture of Kazakh SSR was 6.5% of the gross social product of agriculture in the USSR.
Table 14. Gross social product (GSP) according to the sectors of national economy in Kazakh SSR and USSR in 1989
Sector |
GSP of Kazakh SSR |
GSP of the USSR |
Share of the GSP of Kazakh SSR in the GSP of the USSR, % |
||
mln. rubles |
% |
mln. rubles |
% |
||
Agriculture |
18.1 |
25 |
276.7 |
17 |
6.5 |
Industry |
32.3 |
45 |
943.5 |
59 |
3.4 |
Construction |
11.1 |
15 |
173.6 |
11 |
6.4 |
Transport and communication |
5.0 |
7 |
72.7 |
5 |
6.9 |
Trade, procurement, material and technical supply and other sectors |
5.0 |
7 |
127.0 |
8 |
3.9 |
Total |
71.5 |
100 |
1 593.5 |
100 |
4.5 |
Source: according to the statistical data of the USSR
Gross agricultural output of Kazakh SSR in 1985 amounted to 13.8 billion rubles. In the structure of the gross agricultural output the larger proportion fell on animal products - 57.5%.
By volume of the gross agricultural output in 1985 the third place in the USSR was occupied by Kazakh SSR, its share in the volume of gross agricultural output in the USSR was 6.6%.
Table 15. The share of gross agricultural output of Kazakh SSR in the volume of gross agricultural output of the USSR in 1985
Sector |
Agricultural products of Kazakh SSR |
Agricultural products of the USSR |
Share of agricultural products of Kazakh SSR in the USSR, % |
||
mln. rubles |
% |
mln. rubles |
% |
||
Crop farming |
5 878 |
42.5 |
92 885 |
44.5 |
6.3 |
Livestock |
7 954 |
57.5 |
115 728 |
55.5 |
6.9 |
Total |
13 832 |
100 |
208 600 |
100 |
6.6 |
Source: “Agriculture of the USSR” statistical book, 1988
The share of Kazakh SSR amounted to 6.6% of the Union production of meat.
Table 16. Production of the main agricultural products in Kazakh SSR, their share in the total volume of USSR production in 1985
Products |
Volume of production in Kazakh SSR, thous. tons |
Volume of production in the USSR, thous. tons |
Kazakh SSR share in the total volume of production in the USSR, % |
Meat (carcass weight) |
1 133 |
17 131 |
6.6 |
Milk |
4 763 |
98 608 |
4.8 |
Eggs (mln.units) |
3 803 |
77 255 |
4.9 |
Source: “Agriculture of the USSR” statistical book, 1988
Kazakhstan was one of the main producers of beef cattle output and wool in the Soviet Union. In 1985 there were 2140 state farms and 388 collective farms in the country. Almost all state and collective farms were multi-industry. Since 60-ies the pig and sheep breeding has been developing in the country.
Table 17. Ship population in 1989 and 2014 in the context of regions, thous. animals
Region |
Animal population in 2014 |
Animal population in 1989 |
Decrease in population |
Republic of Kazakhstan |
15 535 |
36 503 |
-20 968 |
Source: according to the Statistics Committee of the MNE of RK
The largest decrease in animal population occurred in the East Kazakhstan, Aktobe, West Kazakhstan and Atyrau regions.
During the period of 1991-2014 the output of products in the livestock farming, except for meat production, had the most stable character and provided internal needs of the country.
Current meat production is far behind the performance of the Soviet period, at the same time the process of industry restoring should be noted in recent years. During the period of 1991 – 2014 the meat production decreased 1.7 times.
2. Number of enterprises.
The Statistical Committee of RK does not publish the dynamics of the number of enterprises in the context of sectors and regions.
In agricultural sector of RK the number of agricultural producers has increased 1.5 times over the period since 2003.
Table 18. Number of agricultural organizations in the Republic of Kazakhstan at the end of the year, units
Year |
Registered |
Current |
2003 |
159 433 |
126 212 |
2004 |
187 139 |
152 527 |
2005 |
196 417 |
161 962 |
2006 |
200 812 |
173 132 |
2007 |
201 890 |
174 608 |
2008 |
201 072 |
174 651 |
2009 |
200 876 |
175 636 |
2010 |
197 033 |
176 822 |
2011 |
214 008 |
188 616 |
2012 |
197 431 |
172 821 |
2013 |
200 665 |
189 930 |
2014 |
202 031 |
191 524 |
Changes of 2014 as compared with 2003,% |
126.7 |
151.7 |
Source: according to the Statistics Committee of the MNE of RK
The share of small and medium-sized business is 75% on average in the agricultural sector in the Republic of Kazakhstan. In livestock farming the average share of small and medium-sized business was 90%. Over 12 years the share of small and medium-sized business varied by no more than 4-5%.
Table 19. The dynamics of the gross output of livestock products and the share of small and medium-sized business
Year |
Total gross output, mln.tenge |
Share of peasant farm enterprise and private subsidiary farms, % |
2003 |
259 497 |
92.0 |
2004 |
307 584 |
92.1 |
2005 |
363 626 |
91.7 |
2006 |
420 821 |
91.1 |
2007 |
490 978 |
91.3 |
2008 |
623 071 |
91.1 |
2009 |
703 338 |
91.4 |
2010 |
774 106 |
90.1 |
2011 |
942 384 |
90.6 |
2012 |
1 011 192 |
90.0 |
2013 |
1 064 338 |
88.7 |
2014 |
1 189 555 |
86.7 |
Source: according to the Statistics Committee of the MNE of RK
The share of peasant farm enterprises in the employment of agricultural sector decreased and amounted to 18.3% in 2014, their share was 21.4% in 2005.
The number of people employed in peasant farm enterprises in 2014 amounted to 293.8 thousand people, as compared with 2005 it decreased by 42%. In agricultural sector the number of employees decreased by 32% in general.
3. Barriers and limitations
The following table presents the matrix of barriers in livestock farming and food industry.
Table 20. The matrix of barriers in livestock farming and food industry
Name |
Milk and diary products |
Meat and its products |
Leather |
Wool |
||
price uncompetitiveness |
lack of raw materials |
v |
v |
v |
v |
|
high tariffs for services |
v |
v |
v |
v |
||
expensive foreign packaging |
v |
|
|
|
||
poor access to financial resources |
high debt ratio |
v |
v |
v |
v |
|
high % rates |
v |
v |
v |
v |
||
absence of long-term lending |
v |
v |
v |
v |
||
taxation imperfection |
“1”-st VAT |
v |
v |
v |
v |
|
PIT |
v |
v |
v |
v |
||
VAT relief for all |
|
|
v |
v |
||
CIT relief under fixed capital renewal |
v |
v |
v |
v |
||
VAT recovery under export |
|
v |
v |
v |
||
Sales limitations |
in the domestic market |
adulteration |
v |
v |
|
|
dumping |
v |
v |
|
|
||
exaction in trade |
v |
v |
|
|
||
absence of logistic infrastructure |
v |
v |
|
|
||
duration of procedures of taking measures on customs tariff regulations |
v |
v |
v |
v |
||
absence of feed culture |
v |
v |
v |
v |
||
in the external market |
trade barriers |
|
|
|
|
|
absence of logistic infrastructure |
|
v |
|
|
||
problems of capacity building |
lack of true statistical account of PRS |
v |
v |
v |
v |
|
deficit in subject specialists at production site |
v |
v |
v |
v |
||
absence of separate authorized body for processing of all agricultural raw materials and production of food |
v |
v |
v |
v |
4. List of potential opportunities for entrepreneurial initiatives.
In the livestock farming there were considered the availability of pasture areas, succulent and coarse fodder, mineralization of groundwater, etc. On this basis some areas of Kazakhstan were removed from the recommended scheme of specialization due to unfavorable agro-climatic conditions. So despite the presence of commercial dairy farms the uselessness of milk production in Kyzylorda region has been proved, where the cost of 1 liter of milk exceeds twice the average data in Kazakhstan due to the lack of dry-land cultivated areas, required for production of succulent fodder.
Table 21. The recommended scheme of specialization of regions according to optimal use of farmland for the production of specific agricultural products
Region |
Beef cattle |
Milk cattle |
Horse breeding |
Meat and greasy sheep breeding |
Karakul sheep breeding |
Fine wool sheep breeding |
Semi-fine wool sheep breeding |
Akmola |
+ |
+ |
+ |
+ |
|
+ |
+ |
Aktobe |
+ |
+ |
+ |
+ |
|
|
+ |
Almaty |
+ |
+ |
+ |
+ |
+ |
+ |
+ |
Atyrau |
+ |
|
+ |
+ |
+ |
|
|
East Kazakhstan |
+ |
+ |
+ |
+ |
|
+ |
+ |
Jambyl |
+ |
+ |
+ |
+ |
+ |
+ |
+ |
West Kazakhstan |
+ |
+ |
+ |
+ |
|
+ |
+ |
Karaganda |
+ |
+ |
+ |
+ |
|
|
|
Kostanay |
+ |
+ |
+ |
+ |
|
|
|
Kyzylorda |
+ |
|
+ |
+ |
+ |
|
|
Mangystau |
|
|
+ |
+ |
+ |
|
|
Pavlodar |
+ |
+ |
+ |
+ |
|
+ |
|
North Kazakhstan |
+ |
+ |
+ |
+ |
|
|
+ |
South Kazakhstan |
+ |
+ |
+ |
+ |
+ |
+ |
|
5. SWOT-analysis of the sector.
Table 22. SWOT-analysis of beef production sector
Strengths |
Weaknesses |
• Availability of vast pasture areas and land resources for the development of beef farming. • Availability of cattle stock for expanded reproduction and increase in beef production. • Availability of nucleus for improvement of breeding characteristics, animal productivity and product quality. • Low cost of land resources • Low cost of labor resources • High domestic demand for beef • Availability of large market for beef in the neighboring countries. • Availability of significant government support to the of beef cattle breeding |
• Underdevelopment of transport and logistics infrastructure, flooding of pastures. • Low livestock productivity • Lack of qualified personnel in the industry • Underdevelopment of the social infrastructure of the village • Lack of fodder procuring equipment • Remoteness of markets for farmers • Long-term of project payback |
Opportunities |
Threats |
• High demand for beef in Russia and China opens significant opportunities for beef export to those countries. • Development of distant-pasture cattle breeding due to the involvement of unused pasture areas through creation of flooding of pastures • Increase in animal productivity through realization of selected and stock breeding |
• High competition on the part of major meat exporting countries: Argentina, Brazil, Australia, New Zealand, offering frozen meat at lower prices. • Unfavorable epizootic situation, disease outbreaks • Outflow of labor from rural to urban areas • Land degradation and shortage of fodder, especially succulent fodder • Reduction of the breeding stock imported from abroad due to improper care |
Source: experts’ review
Table 23. SWOT- analysis of lamb production sector
Strengths |
Weaknesses |
• Availability of vast territories • Low cost of land resources • Low cost of labor resources • Constant demand for lamb in the domestic market • Climatic conditions of South Kazakhstan allow realization of low-cost year-round pasture management • State support to the sector |
• Low livestock productivity • Insufficient level of selected stock breeding. • Fragmentation of livestock into small private subsidiary farms • Lack of infrastructure in remote pastures (wells, cattle-driving routes and roads); • Inefficient use of pasture resources |
Opportunities |
Threats |
• Availability to increase sheep population without harm to the environment • Organic production (without genetic engineering) • Development of production output of the meat sector by “halala” standards is a potential opportunity for domestic meat producers to enter the markets of Arab and Middle East countries |
• Epizootic threat • Outflow of labor from rural to urban areas • Threat of breaking of brood material due to improper use of genetic potential of breeding animals, including imported ones |
Source: experts’ review
Table 24. SWOT- analysis of pork production sector
Strengths |
Weaknesses |
• Constant demand on the part of population; • High demand in the markets of Russian regions, boundary with Kazakhstan • Low cost of labor resources; • Availability of fodder |
• Low livestock productivity; • Lack of breeding material; • High cost of production; • Inefficient industrial management; • High cost of fodder; • Low share of industrial production |
Opportunities |
Threats |
• Availability of opportunity to increase the industrial production for export to Russia; • Opportunity to substitute other types of meat in case of reduction in beef production of cattle or small cattle |
• Competition on the part of cheaper imported frozen products, which is now mainly used in the processing. • Competition on the part of Russian and Belarusian manufacturers. |
Source: experts’ review
Table 25. SWOT- analysis of horse meat production sector
Strengths |
Weaknesses |
• Horse meat is in high demand because it is a national product • Low housing cost due to year-round pasture management • Availability of vast pasture areas • The highest profitability in the livestock farming |
• Weak breeding structure • Small commodity: most part of horses population is concentrated in private subsidiary farms • Inaccessibility of pastures • Lack of infrastructure in remote pastures (wells, cattle-driving routes and roads); • Inefficient use of pasture resources |
Opportunities |
Threats |
• Increase in breeding stock due to introduction of advanced technologies • Potential for the intensification of production |
• Epizootic threat • Outflow of labor from rural areas • Reduction in pork consumption in Kazakhstan |
Source: experts’ review
Table 26. SWOT- analysis of dairy farming
Strengths |
Weaknesses |
• Large areas of agricultural lands for pastures and fodder growing • Large number of dairy cattle • Historically proved experience of livestock farming
|
• Small commodity of production; • Low milk yield • Low quality of products • Low share of breeding stock • Shortage of fodder • Shortage of qualified personnel |
Opportunities |
Threats |
• Increase in milk yield and milk quality • Reduction of transaction costs in the production and sales of goods • Increase in steady supply of milk
|
• Further reduction of cultivated areas of fodder crops • Aridization • Epizootic outbreaks • Reduction in demand on the part of processing companies |
Source: experts’ review
Table 27. SWOT – analysis of poultry breeding in Kazakhstan
Strengths |
Weaknesses |
• Manufacturers – large agricultural organizations • Availability of fodder.
|
• Weak equipment with advanced manufacturing technology; • Weak marketing of products output; • Insufficient level of production efficiency; • Weak financial independence and high dependence on state support; • Lack of qualified personnel |
Opportunities |
Threats |
• Production increase due to introduction of innovations and advanced technologies; • Development of domestic goods marketing, promotion of products to the domestic market; • Potential to improve production efficiency; • Waste recycling of poultry farms. |
• Competition on the part of the Customs Union countries; • Import of cheap poultry meat from leading manufacturers - the United States, Brazil; • Volatility of prices for cereals undermines the financial stability of the manufacturer; • Risk of the second wave of the financial crisis may cut domestic producer from financial resources needed for modernization completion; • Significant reduction in volume of subsidies can lead to the bankruptcy of some enterprises. |
Source: experts’ review
Table 28. SWOT – analysis of wool production in Kazakhstan
Strengths |
Weaknesses |
• Availability of vast pasture areas • Low labor costs in comparison with the leaders • Availability of own capacities for wool washing • Availability of enduring local breeds which are resistant to climate |
• Low productivity • Prevalence of low-quality wool • Main volume of production in private subsidiary farms • Low demand for coarse wool • Lack of distribution channels to the international market • Undevelopment of wool monitoring system • Small amounts of fine wool production and its unstable quality • Outdated equipment and technology • Lack of financial resources |
Opportunities |
Threats |
• High raw material demand on the part of China • Possibility to increase the number of sheep • Reconstruction of the infrastructure, established in the Soviet era • Improvement of the quality of wool and shearing • Competitiveness of the price • Prior investments and refining capacities reserve • Domestic demand for wool goods |
• Change or removal of subsidies for wool production. Production profitability is fully formed due to subsidies • Reduction of support after WTO accession • High competition on the part of world leaders • Lack of qualified personnel |
Source: experts’ review
Review on cotton fiber
1. Introduction.
Agro-industrial complex of Kazakhstan is a priority for the state. One of the most important factors, providing sustainable development of agriculture, is the orientation on production efficiency and agricultural products processing, which involves reasonable and integrated use of land, labor, material and primary resources, a special role is assigned to sustainable development of the territorial aspect, contributing to more efficient use of basic kinds of resources.
The production of food and processing industry accounts for about 1.7% of GDP in the Republic of Kazakhstan. This sector includes oil and fat, and milk industry, meat, fruit and vegetables processing, production of confectionery, sugar, cotton fiber and fodder, and all of them are briefly described.
The first part of this review describes the internal market for cotton fiber production, historical background of sector development, existing barriers and limitations, SWOT-analysis of the sector.
1. Internal market capacity.
South-Kazakhstan region, as in the Soviet times, is specialized in cotton growing, but nowadays the cultivated areas and gross collection of raw cotton decline from year to year. The cultivated area of cotton in South-Kazakhstan region amounted to 127.5 thousand ha in 2014, decreased by 13.1 thousand ha when compared to 2013 (140.6 thous. tons), the gross collection amounted to 320.7 thous. tons in 2014, decreased by 17% or 76 thous. tons in comparison with 2013 (396.7 thous. tons).
Cotton fiber production in the country is located in the cotton growing regions. The volumes of cotton fiber production in the country vary from year to year, but in general in comparison with 2003 the volume of cotton fiber production in 2014 amounted to 63 thousand tons, decreased by 70 thousand tons. It should be noted that more than 90% of sugar is produced from imported cane raw sugar.
Picture 1. Dynamics of cotton fiber production in Kazakhstan over the period of 2003-2014, thous. tons
Source: according to the Statistics Committee of the MNE of RK
Analysis of the balance of cotton fiber production has shown that over the period from 2003 to 2014 the production decreased from 133 thousand tons to 63 thousand tons. The biggest export was 11.5 thousand tons in 2011. This production balance includes the data on carded or combed cotton fiber.
The cultivated area of cotton in South-Kazakhstan region decreased from 199.5 thous. ha to 127.5 thous. ha over the period from 2003 to 2014. The gross collection decreased from 400 thous. tons to 320 thous. tons.
The volume of cotton fiber production in South Kazakhstan region decreased over the period from 2003 to 2014. In 2014 the volume of cotton fiber production was 63 thous. tons.
Table 1. Dynamics of cultivated areas and gross collection of cotton in South Kazakhstan region, and cotton fiber production
Region |
2003 |
2004 |
2005 |
2006 |
2007 |
2008 |
2009 |
2010 |
2011 |
2012 |
2013 |
2014 |
cotton |
||||||||||||
Cultivated area, thous. ha |
199.5 |
223.5 |
204.1 |
200.2 |
205.8 |
178.6 |
140.1 |
137.2 |
160.6 |
147.8 |
140.6 |
127.5 |
Gross collection, thous. tons |
402.7 |
467.1 |
465.0 |
435.4 |
441.7 |
317.5 |
270.0 |
239.9 |
336.1 |
379.7 |
396.7 |
320.7 |
cotton fiber |
||||||||||||
Production, thous. tons |
133 |
140 |
156 |
145 |
110 |
133 |
97 |
91 |
76 |
106 |
106 |
63 |
Source: according to the Statistics Committee of the MNE of RK
According to the Customs Control Committee of the MF of RK the cotton fiber import to Kazakhstan has unstable dynamics. The sharp increase in imports was noted in 2005 and 2006, and reduction - in 2008. In general the volume of imported cotton fiber decreased over the period of 2003 – 2014.
Table 2. Balance of cotton fiber production over the period of 2003-2014, thous. tons
Characteristics |
2003 |
2004 |
2005 |
2006 |
2007 |
2008 |
2009 |
2010 |
2011 |
2012 |
2013 |
2014 |
Production |
133 |
140 |
156 |
145 |
110 |
133 |
97 |
91 |
76 |
106 |
106 |
63 |
Import |
0.1 |
0.3 |
||||||||||
Resources |
155 |
183 |
168 |
152 |
119 |
141 |
107 |
99 |
82 |
112 |
113 |
67 |
Export |
1.2 |
1.0 |
0.1 |
1.2 |
11.5 |
|||||||
Internal consumption |
135 |
171 |
160 |
144 |
111 |
131 |
99 |
92 |
76 |
104 |
95 |
61 |
Of the total consumption according to economic activity |
135 |
171 |
160 |
144 |
111 |
131 |
99 |
92 |
76 |
104 |
95 |
61 |
Source: according to the Statistics Committee of the MNE of RK
Existing capacities of enterprises for raw cotton processing in Kazakhstan allow to process up to 384 thousand tons per year. But almost all enterprises operate not at full production capacity due to a number of problems in the industry. The use of annual average capacity of the processing enterprises amounted to 16% in 2014.
Table 3. Production output at specialized capacities in RK, tons
Characteristics |
2010 |
2011 |
2012 |
2013 |
2014 |
Republic of Kazakhstan |
|
|
|
|
|
Production output |
91 063 |
75 134 |
105 813 |
105 969 |
62 899 |
Use of annual average capacity in the account year, % |
35 |
22 |
28 |
25 |
16 |
Capacity at the end of the year |
|
|
|
|
384 229 |
Capacity at the beginning of the year |
792 808 |
696 958 |
726 458 |
803 458 |
424 229 |
Annual average capacity, operated in the account year |
257 729 |
347 229 |
379 229 |
424 229 |
384 229 |
Source: according to the Statistics Committee of the MNE of RK
Exports of cotton-fiber during the mentioned period also decreased from 117 thousand tons in 2003 to 47 thousand tons in 2014. The largest volume of exports of cotton fiber of Kazakhstan was marked in 2006 and amounted to 183.8 thous. tons, or 4 times larger than the exported volume in 2014. More than 90% of exports are raw cotton fiber.
Picture 2. The volume of imports and exports of cotton fiber over the period of 2003 – 2014, thous. tons
Imports Exports
Note: the volume of exports and imports was taken by 2 commodity lines - 5201 (uncombed cotton fiber) and 5203 (carded or combed cotton fiber)
Source: according to the Statistics Committee of the MNE of RK
Export of cotton fiber was carried out in 10 countries. Among them the largest importers of Kazakh cotton fiber are Russia and Latvia, whose share accounted for about 80% of exports. However, exports of cotton fiber in 2014 significantly reduced 2.5 times or by 70 thous. tons in relation to 2003.
Table 4. The volume of fiber cotton exports in the context of countries, tons
Country |
2003 |
2004 |
2005 |
2006 |
2007 |
2008 |
2009 |
2010 |
2011 |
2012 |
2013 |
2014 |
Latvia |
61 045 |
73 322 |
89 740 |
76 026 |
70 784 |
49909 |
17 395 |
19 323 |
10 146 |
18 439 |
34 567 |
19 044 |
Russia |
44 026 |
60 887 |
89 869 |
86 355 |
30967 |
43 511 |
37 143 |
12 742 |
22 318 |
19 562 |
17 766 |
|
Moldova |
52 |
314 |
2 522 |
2 391 |
2 403 |
6 764 |
6 897 |
8 175 |
||||
Belarus |
2 578 |
1 221 |
920 |
3 176 |
3 043 |
1 177 |
132 |
164 |
165 |
658 |
3 261 |
1 914 |
China |
2 895 |
7 568 |
7 070 |
10 160 |
710 |
2 005 |
258 |
2 407 |
2 182 |
1 495 |
2 901 |
382 |
Iran |
8 564 |
11 399 |
100 |
3 188 |
815 |
677 |
||||||
Russia |
32 902 |
|||||||||||
Ukraine |
2 982 |
1 222 |
3 930 |
8 877 |
5 508 |
4 335 |
3 629 |
51 |
2 411 |
|||
Belgium |
|
176 |
256 |
433 |
||||||||
Turkey |
195 |
671 |
1 489 |
180 |
89 |
358 |
||||||
Other countries |
9 115 |
2 057 |
0 |
635 |
545 |
161 |
225 |
1 904 |
151 |
79 |
174 |
0 |
TOTAL |
117099 |
142576 |
159990 |
183796 |
170509 |
93229 |
69050 |
69263 |
28 873 |
52 509 |
68 151 |
47 281 |
Source: according to the State Revenue Committee of the MF of RK
The main consumers of cotton fiber are the neighboring countries: China, Russia and Latvia.
In 2014 China imported more than 2 million tons of cotton fiber. But when compared to 201 the volume of imports declined significantly in 2014.
Over the last 5 years Russia has imported on average 75 thousand tons of cotton fiber per year. Cotton industry in Russia is 100% dependent on imported raw materials - cotton fiber, the main part of which is imported from the CIS countries. The main suppliers of cotton fiber to Russia are Uzbekistan, Kazakhstan, Kyrgyzstan and Tajikistan. Kazakhstan share in the total volume of cotton fiber exports to Russia amounted to 30% (on average for 2010-2014).
Latvia is the main transfer point of cotton fiber to Western Europe countries, where the network of specialized companies performs the functions of storage, forwarding, financing of transactions, intermediate trade for goods resale to Western countries.
Thus it can be concluded that the potential volume of the external market of cotton fiber is very significant, and export is limited now only by the production volumes in the country.
Table 5. Capacities of key external markets of fiber, thous. tons/mln. dollars
2010 |
2011 |
2012 |
2013 |
2014 |
||||||
Import |
thous. tons |
mln. dollars |
thous. tons |
mln. dollars |
thous. tons |
mln. dollars |
thous. tons |
mln. dollars |
thous. tons |
mln. dollars |
China |
2 836.1 |
5 654.6 |
3 362.6 |
9 466.1 |
5 134.7 |
11 804.0 |
4 147.0 |
8 440.5 |
2 438.8 |
4 989.9 |
Russia |
73.7 |
118.5 |
77.6 |
184.7 |
84.5 |
127.0 |
66.5 |
102.1 |
70.7 |
113.5 |
Latvia |
19.8 |
32.2 |
12.7 |
31.8 |
18.7 |
30.6 |
35.2 |
58.1 |
19.1 |
30.9 |
Source: UNContrade
In 2014 the export of cotton fiber from Kazakhstan amounted to 47 thousand tons, over the last five years this figure decreased by 30%. The main reason for such decline is the development of own cotton fiber processing to produce high value-added goods such as yarn and fabric.
Currently within the program of cotton cluster development in the territory of “Ontustik” free economic zone 3 investment projects are implemented:
· “Khlopkoprom-cellulose” LLP, which went into production in July 2010, produces 2500 tons of cotton cellulose, 1000 tons of carboxy methyl cellulose (CMC), 2500 tons of absorbent cotton per year;
· “OxyTextile” LLP is automated spinning-doubling factory with the performance of 6183.3 tons of cotton yarn per year.
· “Yutex-KZ” JSC is a modern textile factory, which will produce annually 10440 tons of yarn, 10764 tons of sateen-atlas, 5112 tons of sateen, 3024 tons of terry fabrics.
It can be supposed that by 2020 the export of cotton fiber will be significantly reduced, and export of products of cotton fiber processing on the contrary will be increased due to the growth of domestic processing, and as a consequence, increase in the production of fabrics and yarns, which are currently not exported.
Table 6. Kazakhstan share in the imports of cotton fiber, thous. tons
Importing country |
Exporter |
tons |
Share, % |
thous. dollars |
Share, % |
China |
Total |
2 438 826 |
100% |
4 989 858 |
100% |
Kazakhstan |
1 781 |
0.1% |
4 630 |
0.1% |
|
Indonesia |
Total |
705 136 |
100% |
1 400 811 |
100% |
Kazakhstan |
1 104 |
0.2% |
1 624 |
0.1% |
|
Russia |
Total |
70 733 |
100% |
113 526 |
100% |
Kazakhstan |
18 983 |
26.8% |
28 892 |
25.4% |
|
Germany |
Total |
48 645 |
100% |
92 550 |
100% |
Kazakhstan |
7 069 |
15% |
13 518 |
15% |
|
Italy |
Total |
48 220 |
100% |
105 427 |
100% |
Kazakhstan |
1 034 |
2.1% |
2 065 |
2.0% |
|
France |
Total |
16 855 |
100% |
35 399 |
100% |
Kazakhstan |
3 784 |
22.5% |
7 509 |
21.2% |
|
Belgium |
Total |
13 497 |
100% |
23 334 |
100% |
Kazakhstan |
2 802 |
20.8% |
5 307 |
22.7% |
|
Belarus |
Total |
12 544 |
100% |
26 190 |
100% |
Kazakhstan |
2 020 |
16.1% |
4 165 |
15.9% |
Source: UNсomtrade
The main competitor of Kazakhstan cotton producers in foreign markets is Uzbekistan. Uzbekistan share accounts for about 5% of the total global volume of cotton production. Cotton growing in Uzbekistan is the leading industry of not only agriculture (cotton accounts for more than 40% of the total agricultural production), but of the entire economy.
Imports of cotton and cotton fiber are absent in Kazakhstan. There is no shortage of raw materials. Cotton is a local product, which is produced and processed into the cotton fiber in South Kazakhstan region. If the calculation is made on the basis of the average cotton fiber output from raw cotton, so in 2014 the cotton fiber production should constitute 100-110 thousand tons, but according to the Statistics Committee 63 thousand tons were produced. The main reason, as stated above, could be the downtime of plants due to obsolescence and depreciation of equipment.
The excess of raw materials is observed in the processing of cotton fiber in the region. According to the data, provided by Kazakhstan Association of light industry, the production capacities of main processors of cotton-fiber account for 31 thousand tons in general, while in 2013 and 2014 106 and 63 thousand tons of cotton fiber were produced respectively. It follows that the production capacities are not sufficient for the processing of cotton fiber into finished products.
2. Number of enterprises (players) in the market.
In Kazakhstan 16 cotton plants with a total capacity of 557 thous. tons per year, located in the South Kazakhstan region, are engaged in the primary processing of raw cotton. One of the plants is governmental and established for the influence on the pricing policy of other plants in order to avoid undervalued purchasing prices for raw cotton for farmers. The government has also established a network of certifying laboratories and subsidizes the cotton quality certification in order to present an objective cost of production for manufacturers.
In South-Kazakhstan region 264 enterprises are engaged in raw cotton acceptance from cotton sowing farms. In the last 5 years 16 cotton plants with a total capacity of 557 thous. tons per year have performed the primary processing of raw cotton. 12-13 companies are occupied in the production of cotton fiber. The largest enterprises are the “Myrzakent” LLP (17-20 thous. tons), “Ak-Altyn” LLP (8-9 thous. tons), “Makta Corporation” JSC (10-12 thous. tons), “Contal” LLP (4-5.5 thous. tons), “Bagara-Macta” LLP (3-8 thous. tons), “KhansuarInvestCompany” LLP (7-12 thous. tons). However, lots of enterprises are loaded on 50-55%. The reason for the low load of cotton plants is that the most of them have a low technology level and outdated equipment.
4. List of potential opportunities for entrepreneurial initiatives.
There are no significant barriers for cotton fiber export. Cost of production of cotton fiber allows products delivering to the key markets with account of transport expenses. The growth of cotton fiber exports is constrained by its production in the country.
Table 7. Potential of export directions of cotton fiber sales, US dollars/tons
Country |
Average import purchase price |
Tariff of export transportation |
Average sale price in RK |
Difference between potential sale price and producer price, with account of tariff for transportation |
Russia (Moscow region) |
1 769 |
69 |
1 663 |
37 |
Latvia (Riga) |
1 893 |
77 |
153 |
|
China (Shandong) |
2 060 |
123 |
274 |
5. SWOT-analysis of the sector.
The strengths of the cotton production include the availability of favorable soil and climatic conditions for cotton growing in the south of the country, as well as geographical proximity of the sources of raw materials and processors, there are undeveloped areas for cotton sowing.
Among the weaknesses can be identified non-observance of agro-technologies, lack of funds for the implementation of new technologies for cotton growing (progressive planting methods, crop tending, irrigation methods, including the control of pests and cotton diseases), without which the intensive management of production is impossible, and as a result low yields and high cost of cotton.
The strengths of the cotton fiber production in the country include geographical proximity of the sources of raw materials, proximity to the largest markets (Russia, China), the growing demand in the world markets, availability of manufacturing capacity.
The weaknesses of the cotton fiber production include a high proportion of export of low value-added products, lack of capital investments in the sector, lack of qualified personnel, outdated equipment.
The opportunities for cotton production development in the country include the opportunity of significant increase in productivity through the introduction of modern and technologies for culture growing and therefore the decline in the prime costs of cotton due to the increase of gross yield.
The possible threats include competition on the part of Uzbekistan and Tajikistan in cotton production, and unstable raw material prices due to currency fluctuations and as a result the growth in prices for energy, fuel, fertilizers, etc.
The opportunities for cotton fiber production development should include the accession to the Customs Union (export potential), the use of the experience of the world technological leaders.
The possible threats include a high level of competition on the part of the world leaders, insufficient attraction of investments to the sector, a possible increase in energy prices, financial and economic crisis in the world.
Table 8. SWOT–analysis of cotton primary processing sector in Kazakhstan
Strengths · Availability of Kazakhstan raw materials for the production of cotton fiber · Geographical proximity to the sources of raw materials · High profitability of production · Availability of production potential |
Weaknesses · Lack of raw materials and as a result the unutilized capacities for processing; · Lack of qualified personnel to increase the production of raw materials; · High proportion of exports with low added value · Lack of investments in the sector |
Opportunities · Increase of Kazakhstan resource base by means of consolidation of farms and observance of agricultural technologies · Export potential to Russia and Europe · Reduction of prime costs due to increase in own production of raw materials for processing |
Threats · Reduction in raw materials production |
Source: experts’ review
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