Kazakhstan’s unrefined sunflower oil production up 70%
International Business News – From January to June this year, the import of sunflower seeds in Kazakhstan increased by 15 times year-on-year. The import demand for sunflower seeds mainly came from production enterprises. Due to the increase in output and exports, the output of sunflower seeds in Kazakhstan could not meet the production needs of domestic factories. Compared with the same period in 2021, from January to July this year, the production of unrefined sunflower oil in Kazakhstan increased by 70%, and the export value increased by 55% to 217 billion tenge.
With the increase in the number of large-scale vegetable oil production enterprises, the actual output of unrefined edible oil in Kazakhstan has also increased. In July last year, there were 46 edible oil factories in Kazakhstan, and now there are 50. The four newly commissioned factories are all large enterprises.
Yadykar Ibragimov, head of the Kazakhstan Oil Crop Processing Enterprises Association, said that the production capacity of sunflower oil has indeed increased. But it has grown in unrefined sunflower oil. Several new plants, mainly producing unrefined sunflower oil, have been commissioned. For example, a large oil mill in Semey can process 1,000 tons of sunflower seeds per day. Another large factory in East Kazakhstan has also been started. The total demand of all processing enterprises in Kazakhstan is now more than 3 million tons, and the total sunflower seed production in Kazakhstan last year was only 1 million tons (revised – 820,000 tons).
According to Yadykar Ibragimov, the production of raw materials in the country can only meet 1/3 of the production needs of factories, so processing companies make up for the shortage of raw materials by importing (148,000 tons from January to June), and the imported raw materials are mainly from Russia. But that’s not enough, so processors prepare to compete for the newly harvested sunflower seeds. In mid-October, all factories will compete for raw materials so that the factories can continue to produce steadily.
In order to support domestic production enterprises, the Ministry of Agriculture of Kazakhstan has implemented a sunflower seed export quota system. At the same time, there are also quotas for the export of refined sunflower oil, so from January to July, the output of refined sunflower oil in Kazakhstan even decreased slightly by 5%.
Yadykar Ibragimov said that even the volume of exports with applications for licenses has been intermittent. For example, processing plants receive export quotas for June-August in the first ten days of July. Businesses suffered losses due to quota delays, as factories bought raw materials during periods of high prices, but before the quotas were granted, the price of sunflower oil in the international market fell and foreign partners refused to buy the factory’s products at the prices agreed in advance in the contracts.
As unrefined sunflower oil exports have grown, mills are also ramping up production. The domestic market is limited, and no one buys the oil because it cannot be stored for a long time.
Yadykar Ibragimov said that the main markets for unrefined sunflower oil in Kazakhstan are Central Asian countries and western China, which is very convenient in terms of logistics. There is little domestic demand, so it is mainly exported to neighboring countries, including Uzbekistan, China, Tajikistan and Afghanistan. These countries account for 90% of Kazakhstan’s total crude oil exports of sunflower oil.
From January to June this year, Kazakhstan exported 198,000 tons of various edible oils and margarines, with an export value of US$275 million. Exports to the largest markets, Uzbekistan and China, doubled, and exports to the Afghan market increased sixfold.