Kostanay Farmers Demand Changes to State Regulation Mechanism of Sunflower Market

The Agricultural Producers Association of Kostanay Region has submitted an official appeal to the Ministry of Agriculture of Kazakhstan demanding changes to the current state regulation mechanism governing the sunflower market. Specifically, the industry association proposes temporarily suspending the export customs duty on sunflower seeds and providing preferential financing to processing plants only on the condition that they use domestic raw materials.

Association representatives emphasize that sunflower remains a high-margin crop today, and Kazakhstan possesses sufficient volumes of raw materials to fully load the capacities of domestic oil extraction plants. However, due to the existing export duty, which stands at 20% of the customs value (but no less than 100 euros per tonne), agricultural producers are deprived of the opportunity to freely access foreign markets and sell their produce at fair prices.

Against this backdrop, the anticipated record sunflower harvest in Russia is increasing pressure on the oilseed market of Kazakhstan and Central Asian countries due to growing supplies of Russian vegetable oil. According to the Association, under these conditions, fair product pricing should be determined based on the balance of supply and demand rather than dictated exclusively by processors.

Farmers point out that the processing sector is currently in a significantly more advantageous position thanks to preferential lending, transport subsidies, reduced railway tariffs, and direct subsidies for processing and feed production. Meanwhile, agricultural producers are forced to sell their harvest solely at prices dictated by processors.

To restore market balance and support Kazakhstani farmers, the Association proposes granting processing plants the full range of subsidies and transport preferences strictly on the condition of utilizing 100% domestic raw materials. Furthermore, they suggest suspending the collection of export customs duties for domestic agricultural producers during periods when processing enterprises are sufficiently supplied with raw materials, thereby fostering healthy competition and market-driven pricing.