Kazakhstan Shifts Export Focus to Wheat Amid Declining Flour Market Share
Kazakhstan's agri-export strategy is undergoing a significant shift, with wheat exports surging while flour shipments stagnate, raising concerns about the country's long-term economic competitiveness. According to official data, Kazakhstan exported 9 million tons of wheat in 2025—a 53% increase from 2024—while flour exports remained flat at 1.928 million tons. This trend has intensified as key regional markets like Uzbekistan, Tajikistan, and Afghanistan increasingly prioritize raw grain imports for domestic processing.
"We are rapidly transforming into a raw material exporter," warned Yevgeny Gan, Chairman of the Board of Directors at Kazakhstan Grain Processing Association, citing data from the National Statistics Agency. "Uzbekistan, for instance, now imports 5 million tons of wheat annually, a 49% increase from 2024, while our flour exports to the region have declined significantly."
Uzbekistan's export growth in processed grain products has surged by 40.4% in 2025, according to Uzbek government statistics, as the country leverages tariff incentives for raw grain imports to expand its flour production capacity. Meanwhile, Kazakhstan's flour exports to Uzbekistan fell by 35% year-on-year, with shipments dropping from 251,000 tons in 2024 to 496,000 tons in 2025—a figure primarily sustained by increased sales to Kyrgyzstan and Turkmenistan.
Recent changes to Kazakhstan's Value-Added Tax (VAT) policy, which eliminated full VAT refunds for agricultural exporters, have further strained the sector. Industry experts warn that these reforms could reduce exporters' profits by up to 13%, potentially leading to higher export prices or lower domestic grain prices. "The new tax rules create conditions where importing Russian grain becomes more profitable than processing domestic wheat," said a Kostanay-based grain processor. Earlier this month, 50,000 tons of Russian grain were already imported, signaling early market impacts.
"The shift from flour to raw wheat exports weakens value addition within Kazakhstan," said Yevgeny Karabanov, head of the Kazakhstan Grain Union's analytics committee. "This could result in systemic economic losses as neighboring countries capture processing profits."
Without urgent policy adjustments, analysts predict reduced investment in domestic agri-production, shrinking market share, and long-term competitiveness risks for Kazakhstan's agricultural sector. The situation underscores the need for strategic reforms to balance raw commodity exports with value-added processing.