Flour and animal feed prices will rise by 15 percent from January 1, 2023 in Kyrgyzstan. The Association of Millers of the country gives such forecast.
It is noted that domestic millers will have to raise prices for their products. This is due to the fact that the period of benefits granted for the import and processing of grain for flour mills ends on December 31, 2022.
State support for the industry is in effect from September 2021 to December 31, 2022 — VAT is reset on the import and processing of grain. Therefore, during the year, despite the conflicts at the border and in neighboring states, there was a stabilization of prices for socially important goods, primarily for essential products. Under an agreement with the Cabinet of Ministers, the millers undertook to ensure two months’ supply of grain and flour in their warehouses.
But problems with the transportation of grain from Russia began in October.
Due to congestion on the railway tracks, Kazakhstan began to introduce conventional bans on the transit of goods in order to clear the railway tracks and stations.
«To date, the stocks of grain and flour at flour mills have decreased and are critically low. The reason for the shortage is both problems with the transit of grain through Kazakhstan and the shortage of grain carriers in Russia. Delay in deliveries reaches 30-40 days. Domestic enterprises have not yet received the volume of raw materials ordered back in October. These reasons caused a significant reduction in the stocks of flour and grain in the warehouses of flour millers. If events are repeated, in which neighboring countries close borders or impose a ban on the export of grain and flour, then we will be able to provide the population with flour for only 25-30 days,» Rustam Zhunushov, President of the Millers Association, said.
As for the increase in the price of flour, from January 1 next year, the cost of grain will increase by 12 percent, and flour — by 15 percent. This is the size of value added tax (VAT) that consumers will pay when buying flour.
«The rise in the price of flour will also affect the cost of bread. Its price may rise by 18-20 percent,» Rustam Zhunushov said.
