Kazakh News Agency, Nur Sultan, February 26, Kazakhstan’s Competition Protection and Development Agency released a message to introduce the monitoring of the price of social and people’s livelihood food.
From 2020 to February 2021, the Kazakhstan Competition Protection and Development Agency has initiated 15 investigations against 9 food production companies and 23 wholesale and retail companies, and investigated and dealt with 10 violations of the”price agreement”. The basis for conducting antitrust investigations is the existence of a”price increase agreement” between the manufacturer and the seller. Price increases due to changes in raw material costs and commodity demand are not considered violations.
Through the analysis of the food market, it is found that there are economic reasons for the increase in food prices. Since 2021, the price of eggs has risen by 10.2%, mainly due to the outbreak of avian influenza. The number of poultry stocks has decreased by 2.6 million (a reduction of 15%), and the price of feed has increased by 150%. The price of sunflower oil rose 5.5%due to a 53.8%increase in international market prices and a decline in sunflower seed production in Russia and Ukraine. Sugar prices rose by 2.3%due to a 64.5%increase in wholesale prices in Russia and Belarus. The price of buckwheat grains rose by 2%due to the lack of harvest of buckwheat, which more than doubled the output. Beef prices rose by 0.6%due to the increase in the prices of live animals and feed exported to Uzbekistan. The main reason for the increase in the prices of fruit and vegetable foods is the decline in reserves in winter and spring and the increase in storage costs.
In general, the root cause of food price fluctuations is the high degree of dependence on imports. Among the 19 important social foods for the people’s livelihood, 9 have failed to achieve complete self-sufficiency. Among them, the dependence on sugar imports is as high as 78%, cheese 50%, poultry 47%, sunflower oil 25%, olive oil 23%, macaroni 27.9%, spring onion 14%, buckwheat grains 12%, and beef 5%.
Ha is a member of the Eurasian Economic Union. As a member of the WTO, Kazakhstan has lifted trade barriers with other countries. Therefore, with the free flow of goods, the rise in foreign food prices is bound to have a direct impact on Kazakhstan’s domestic prices. In order to stabilize prices, the Kazakh government adopts a series of price intervention measures each year, including setting ceiling prices, providing liquidity loans for sellers, and allocating food from the national commodity reserve. The above measures failed to change the market supply and demand situation, but brought risks to the construction of the food market and business operations, and had a certain impact on attracting investment and inflation.
One of the policy directions for the development of competition in Kazakhstan is to reduce barriers to market access and price control tools. To this end, the Competition Protection and Development Agency recommends formulating and implementing important social and people’s livelihood food market development plans; providing subsidies for agro-industrial complex enterprises to build food markets; lowering the threshold for obtaining subsidies and shifting subsidy funds from large enterprises to farmers and family agriculture. The main policy directions for stabilizing food prices are to promote the comprehensive development of commodity markets, increase investment attractiveness, reduce non-market interventions, and implement prudent support for producers and price stabilization policies.