The Government of Kazakhstan is considering the possibility of launching joint flour mills in Tajikistan. Meanwhile, Kazakhstani grain processors are against launching joint flour producing enterprises in Tajikistan.
The Union of Grain Processors of Kazakhstan considers it unacceptable to launch joint flour mills in Tajikistan. Kazakh millers believe that Tajikistan is establishing flour mills at the expense of Kazakhstan and supplies flour to Afghanistan, which is the most profitable market. As a result, Kazakhstani flour mills are reportedly losing sales markets and incurring losses.
Tajikistan, Uzbekistan and Kyrgyzstan have reportedly increased the purchase of grain in Kazakhstan and reduced the volumes of flour imports. And this state of affairs does not suit Kazakhstani producers.
They say they buy grain at a high price, grind it, process it, and here the neighbors are developing their flour-grinding industry due to Kazakhstan gain.
According to Kazakhstani grain processors, neighboring countries have created unequal conditions for competition. For example, the VAT rate on flour imports during customs clearance in Tajikistan is 18 percent, while VAT rate on grain imports is 10 percent. Therefore, it is not profitable for Tajik suppliers to buy flour.
As a result, Tajikistan reduced flour imports from 460,000 tons in 2007 to 95,000 tons in 2020. At the same time, Tajikistan’s annual grain imports have increased to 1 million tons.
Meanwhile, several Tajik-Kazakh joint ventures now operate in Tajikistan. One of them is the Grain Company LLC, which was established on July 6, 2007.
Tajikistan has taken the path of diversifying the acquisition of raw materials – more than 50 flour mills in Tajikistan purchase grain not only from Kazakhstan but also from domestic producers.
Besides, Tajikistan annually produces approximately 800,000-900,000 tons of wheat that covers more than 40 percent of the country’s annual requirements in grain.
In addition, Tajikistan purchases grain from the Russian Federation, although it is more expensive due to transport costs and export duties
According to data from the Ministry of Industry and New Technologies of Tajikistan (MoINT), Tajik flour mills’ capacities allow fully satisfying the internal need for this product and also partially shipping it to foreign markets.
