Transport collapse spurs poultry prices in Kazakhstan

Kazakhstan newspaper, Karavan, citing local market players, said that the poultry industry has been in turmoil since September 2022, when the problem of a lack of railway carriers came to the fore for the first time. It is estimated that the country needs at least 300 railway carriers to transport feed crops from the Northern Kazakhstan region, where the main production capacities are concentrated, to other parts of the country.

The National Oilseed Processors Association of Kazakhstan commented that there is practically no alternative for transporting feed crops by rail. Delivering feedstuff by trucks is not an option due to long distances and, consequently, high costs. There is no clarity on what caused a shortage of railway carriers, but a lack of investments by key players in fleets renewal might be one of the reasons to blame.

Worsening competitiveness

The present difficulties for poultry farmers in Kazakhstan are already reflected in the foreign trade statistics. The Kazakhstan poultry farmers association estimated that during the first quarter of 2023, the country imported 11,800 tonnes of poultry meat from Russia, almost equal to the 11,900 tonnes Kazakhstan imported last year.

The hike in imports is accompanied by a drop in exports. In the first quarter of 2023, only 6,500 tonnes of broiler meat was sold to foreign customers, compared to 12,000 tonnes during the same period of the previous year, the association estimated.

“Our domestic [poultry] meat is more expensive [compared with imports],” the farmers’ association told Caravan. “This is due to ongoing systemic problems in the industry, which primarily include high production costs stemming from constantly rising grain prices, outdated equipment, machinery and low diversification of production at domestic poultry farms. In addition, the industry depends on imports, breeding material, veterinary drugs, vitamins, equipment, and containers,” the association said.

Grey imports persist

Over the past year, Kazakh poultry farmers have repeatedly called on the authorities to crack down on grey imports. The farmers complained that some part of poultry meat penetrates the country “without supporting veterinary documents, labelling, and without paying taxes”.

These supplies undermine the industry’s profitability and make large-scale state aid allocated to support the poultry industry less effective. In 2022, the Kazakh government allotted 30 billion tenge (US$67.5 million) to subsidies poultry farming in the country.