Kazakhstan trading companies ask for an increase in the number of quotas

International Business News  –  According to Kazakhstan Agricultural Network, the Ministry of Agriculture of Kazakhstan implemented a quota system for the export of sunflower seeds from July 8 to September 30. The total quota was small at 15,000 tonnes, export applications were issued in just three working days, and applications from dozens of trading companies were rejected, meaning companies would be out of work for the next three months. To this end, the export enterprises collectively sent a letter to the Ministry of Agriculture, requesting to increase the export quota of sunflower seeds, and they passed the letter to the relevant departments through the Haatamaken Entrepreneurs Association.

According to Nadezhda Stepura, director of Prom Line Ltd, the allocation of export quotas for sunflower seeds is carried out according to a simplified procedure. To obtain phytosanitary certificates, trading firms bring sunflower seeds from various regions and prepare them for shipment. With quotas running out so quickly, entrepreneurs now have the option of either returning products that didn’t get their quotas or stockpiling sunflower seeds until October. The cost of transporting sunflower seeds to the place of origin amounts to 2.5 million tenge. But the three-month quota was released within three working days. Quotas were allocated on Friday 8 July and Prom Line prepared information documents and submitted the application on Monday, the application was rejected on 13 July. There are many businesses in East Kazakhstan that encounter this situation. So businesses turned to Atameken, the association to help entrepreneurs.

In the collective letter, the trading companies asked the Ministry of Agriculture to increase the number of quotas and resume the previous quota allocation process. Applicants that have already been allocated quotas will be excluded from the allocation of additional quota quantities.
Nadezhda Stepura said that if there is no quota, companies will not have jobs until October, and the products that have been acquired may also deteriorate, and not all trading companies have storage warehouses. In addition, there is an additional cost to return the product to the warehouse. The company has ordered the carriages, signed the contract, and should start receiving advance payments from buyers today and tomorrow. The company needs to settle with the seller, or return the sunflower seeds. Therefore, companies that have not obtained export quotas want to increase the number of quotas.
At the same time, trading companies have also noticed that export quotas for the final quarter are being allocated. Considering favorable weather conditions, a high sunflower seed production is expected for the new season in Kazakhstan.

Nadezhda Stepura believes that the current export quota of 15,000 tons is very small for so many exporters. In previous applications, there were about 280 participants. The quota per applicant is now capped at 500 tonnes. In this case, only 30 companies in Kazakhstan have the opportunity to export. Therefore, exporting companies want support and increase the number of quotas.

In just one day, more than a dozen businesses from East Kazakhstan have turned to Atameken for help with the problem, and the number of people preparing to send a letter to the Department of Agriculture is likely to increase.

Earlier, President Tokayev also spoke about the imposition of export restrictions, and he instructed the government to analyze the effectiveness of the mechanism. Currently, banning the export of some products is a decision made without considering the balance of supply and demand of goods. This will either lead to a shortage of supply or make it less attractive to produce the desired goods. Consequently, the effectiveness of such measures declines rapidly.

“The government should approve rules that shape the balance of important commodities and, most importantly, develop a unified information monitoring system. This will allow us to have reliable product balance data for decision-making,” the president said.