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Kyrgyzstan’s grain prices jump
Citizens stock up on flour goods
By Bakyt Ibraimov
BISHKEK – Kyrgyzstan has seen an average jump of 2 KGS per kilogramme (US $0.04) in bread and flour products. Kyrgyz citizens fear further increases, but the government promises to keep the price under control.
“Until recently, I was buying Borodinsky (pumpernickel) bread for 10 KGS (US $0.21)," Bishkek senior citizen Aisha Toktosunova said. "Now they are selling it for 11 KGS (US $0.24). And flour has also become more expensive. A kilogramme of flour cost 14 KGS (US $0.30); now, it’s 16 KGS (US $0.34).”
Grain prices increased an average of 30% in July, because of droughts in Russia and Kazakhstan, economist Jumakadyr Akeneyev reported.
“The price per tonne of grain today ranges from US $250-270, and it is possible that it will further increase. And this means that flour and bread will become 10-15% more expensive,” Akeneyev said.
At a press conference August 9, Kyrgyz Agriculture Minister Mamatsharip Turdukulov said he did not expect a sharp rise in the price of grain products.
“Last month, we saw an increase (per kilogramme) in the price of flour in the range of 2 KGS, and this is completely normal,” he said. “In 2010, we will harvest 871,000 tonnes of grain, which is 150,000 tonnes less than last year’s figures. This amount will be bought from Kazakhstan.”
The government is filling its granaries by harvesting according to Kyrgyzstan’s food security plan, Turdukulov said.
“Our country as a whole requires 1.2m tonnes of grain. We'll harvest 503,000 tonnes of wheat in all. In mid-August, 300,000 tonnes will be harvested from Kyrgyzstan’s fields. The remaining crop will be harvested before the end of September.”
The situation regarding the provision of grain remains precarious, which could lead to restriction of Kyrgyzstan’s grain supply, Akeneyev said. Kazakhstan, one of the largest grain exporters, dropped its 2010 crop forecast as droughts reduced cultivated lands by 80,000 ha.
Some flour mill owners are not ruling out the possibility that Kazakhstani suppliers are using the drought to further their own interests.
“One can't avoid noticing that wholesalers and middlemen, working through their government, are trying to eliminate customs duties on the import of grain,” said Ruslan Taigarayev, the director of Akun Ltd., which produces flour and flour goods. “Domestic companies suffer because it is harder for us to compete with our counterparts in Kazakhstan, since they have the ability to buy wheat at low prices.”
Kyrgyzstan has to import durum wheat because it produces low-quality grain, Taigarayev said.
“It is not possible to bake bread from this flour because of the low gluten content, so the country will continue to buy the grain from Kazakhstan," he said.
Kyrgyzstan needs unified agrarian doctrine
For this reason, Kyrgyzstan needs to adopt a unified agrarian doctrine for 2010-2020, Centre for Agribusiness Competitiveness Director Torogul Bekov said.
“Presently, the country has laws and programmes that focus on developing and supporting the agricultural sector, but they all work in different directions,” Bekov said.
In 2009, Kyrgyzstan grain reserves were at 120% of national consumption, he said. Prices went down, costing local farmers money.
“Under a single programme, we could import up to 100,000 tonnes of Kazakh grain in order to renew the seed reserves," he said.
As for the increase in refined grain and flour prices, a press release from the Economic Regulation Ministry states: “The price of wheat increased by 1-2 KGS in the country’s (rural) regions, but its average price is in the range of 10 KGS in the capital.”
The press release reported that the price of grade-A flour had increased by 2.2-2.4 KGS (US $0.047–0.052), reaching 18-22 KGS (US $0.39-0.47) per kilogramme.
The average retail price for grade-A flour is 9.8% higher than the wholesale price for Akun, 11.1% higher than for Elnur and 15.8% higher than for Yashar, according to the Economic Regulation Ministry.