The Union of Grain Processors of Kazakhstan reported a sharp increase in the cost of testing required to obtain a phytosanitary certificate for exported flour. Millers reported that the tariff has increased almost tenfold since November 24. This increase will lead to the loss of export markets and will severely impact the flour milling industry, according to the APK News agency.
"The Union of Grain Processors of Kazakhstan expressed serious concern over the sharp increase in the cost of entomological testing required to obtain a phytosanitary certificate for exported flour, which has a direct impact on product costs and reduces the competitiveness of domestic flour in foreign markets," said Zhomart Motyshev, head of the Union.
According to him, until recently, the cost of this testing was 42 tenge per ton, which averaged 2,856 tenge per railcar (approximately 68 tons). However, starting November 24 of this year, flour mills were officially notified of changes to the analysis procedure.
According to the new procedure, inspections are now carried out on a railcar-by-railcar basis, with the cost of the service increased to 22,630 tenge per railcar.
"Thus, the tariff has increased almost tenfold, raising serious doubts about its economic justification and feasibility," noted Zh. Motyshev.
Such an increase in costs will directly impact the cost of finished products, reduce their competitiveness in foreign markets, and create additional barriers to export activities, according to the Union.
"The President of the Republic of Kazakhstan emphasized in his Address that, in the context of increasing global competition and changing global commodity flows, an effective marketing policy is particularly important. Kazakhstan must preserve and strengthen the domestic and export niches that have been formed over the years. The Government has been tasked with expanding the geography of exports and promoting domestic goods in foreign markets. At the same time, the President outlined an ambitious goal: to increase the share of processed products in the agricultural sector to 70% within three years. Achieving this goal is impossible without creating and maintaining stable, predictable, and economically feasible conditions for foreign trade," noted Zhomart Motyshev.
Flour millers claim that a sharp increase in the cost of services for processing flour products for export will inevitably lead to a significant increase in the price of processed grain products. This creates real risks of losing traditional export markets and weakening Kazakhstan's position in the processed, non-commodity segment.
The Union of Grain Processors of Kazakhstan has written to the Ministry of Agriculture and the National Chamber of Entrepreneurs "Atameken" requesting assistance in reversing the decision regarding flour and grain products.