Kyrgyzstan Wheat: Joint Venture or Branch?

Winter wheat is Kyrgyzstan’s second largest crop, followed by barley, corn, and rice. In mid-2022, the Minister of Agriculture of Kyrgyzstan, Askarbek Dzhanybekov, informed that it is expected to bring the level of provision with food Wheat to 65 percent or more. According to him, the country’s yearly need is 768,000 tons of food Wheat. Approximately 630,000 tons of Wheat are produced in the Kyrgyz Republic. Wheat cultivation is centered in the Fergana Valley, Talas Region, and Chüy Region.

According to the USDA data, in MY2021/2022, Kyrgyzstan’s Wheat area harvested and production was 250,000 hectares and 0.36 million tons, respectively, with a 1.45 tons/ha yield. Domestic consumption was 0.78 million tons. For MY2022/2023, the Wheat area harvested and production is estimated at 260,000 hectares and 0.57 million tons, respectively, with a 2.19 tons/ha yield. Domestic consumption is 0.76 million tons for 7 million people in the country.

According to official data, Kyrgyzstan annually imports about 100,000 tons of Wheat to replenish the State Material Reserves Fund. Russia and Kazakhstan are leading wheat suppliers to the country. Chairman of the Cabinet of Ministers of Kyrgyzstan, Akylbek Japarov, met with Dmitry Sergeyev, Director-General of the Russian United Grain Company, in Late September 2022. The issue of increasing grain supply from the Russian Federation to the Kyrgyz Republic was discussed at the meeting.

The Russian Federation will remain our strategic partner. We are interested in cooperation with United Grain Company (OZK). I am sure that this will be a mutually beneficial cooperation, Akylbek Japarov said. The United Grain Company is a Moscow-based trade and logistics operator of agricultural products, ensuring fulfillment of the potential of Russian grain on the world market. It is one of the five largest Russian exporters of food grains which offers a qualitatively new level of export operations on the principle of “one window.”

It is known that the company intends to open its branch in Kyrgyzstan. Dmitry Sergeyev said that the company intended to increase the volume of grain supplies to the country and was considering the issue of creating a joint venture with the Kyrgyz side.

At the same time, Kyrgyzstan intends to replenish the reserve stock with Wheat of its own production. Deputy Chairman of the Cabinet of Ministers, Bakyt Torobaev, said in Chui region in October 2022. Participants of the meeting discussed the implementation of a pilot project on growing their own grain products as a strategic reserve of the country. Bakyt Torobaev noted that earlier Wheat was bought in Russia, but the situation should change now.

As part of the pilot project, it is planned to redirect the money allocated for purchasing imported Wheat to our production. Farmers are given the task of growing the necessary volumes of food Wheat, excluding dependence on grain imports, Bakyt Torobaev said.

At least 40,000 hectares of arable land will be chosen in the regions on an experimental basis, which will be used in the pilot project. The Material Reserves Fund under the Ministry of Emergency Situations should provide farmers with seeds, fertilizers, and the necessary fuel. He stressed that local Governments, specialists from the Ministry of Agriculture, and employees of state banks would control the entire process — from plowing to harvesting the crop grown under the pilot project.

As part of the next stage, the Ministry of Agriculture and the State Material Reserves Fund, together with the Association of Flour Mills, will conduct a detailed analysis of the purchase of grain crops.