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Industrial products cheaper in Kazakhstan

Business Materials 12 August 2015 18:40 (UTC +04:00)

Baku, Azerbaijan, Aug. 12

By Elena Kosolapova - Trend:

Kazakh industrial products cheapened in January-June 2015 by an average of 6.9 percent, according to the analytical service Ranking.kz.

The largest decrease was in the mining sector's products, while the prices in the processing industry rose over this period by an average of 2.7 percent.

By June 2014, the products of the industrial enterprises from the CIS cheapened in the Kazakh market by 9.4 percent, while the same products from other countries fell in price by 35.4 percent.

Kazakh producers lowered prices by 4.9 percent.

The mining industry is the most competitive industrial sector of Kazakhstan in terms of price.

The producer's prices in the mining industry have been declining for a long period amid the weakening prices of oil and industrial metals, which are the main products of this sector.

The analytical agency said the pace of decline in industrial products' prices has been constantly growing in 2015.

Producers from Kazakhstan's processing sector are in the most difficult situation.

The prices on their products continue increasing although less active. The prices increased by 2.7 percent in January-June 2015 compared to the same period of last year. At the same time, the products of the enterprises of the CIS countries reduced by 8.3 percent (an undoubted leader in this group is Russia, its share in the trade turnover of Kazakhstan with the CIS countries amounted to 70 percent in 2014).

The companies of the energy complex (generating, distributing electric and thermal energy, the companies engaged in the gas distribution) are in a favorable situation.

The prices on the products of these companies are growing steadily (by 10 percent compared to the same period of last year). This is explained by the fact that fixed rates are imposed in relation to energy companies. As a rule, they are growing in value not less than the inflation rate.

At the same time, the competitiveness of the companies of the sector is beyond a doubt. The companies engaged in the energy sector, are the entities of natural monopolies and mostly operate on the domestic market (excluding a power generation market with small export and import).

Regarding individual products, it is necessary to note the increase in the price of coal, which increased by minimum 0.7 percent in December 2014, while coal from CIS countries increased by 13.2 percent.

Kazakhstan metallurgists saw a 5.8 percent decline in aluminum prices, while the CIS partners were able to reduce the price by 13.6 percent, and the producers of the other countries - by 23.9 percent.

The weakening of the competitiveness of Kazakh products is mainly due to the ratio of the national currency against the currencies of trading partners, which is unfavorable for industrialists. The collapse of the Russian ruble (about 50 percent decrease in an average) against the dollar in 2014 has made Russian goods more attractive in price on the Kazakh market. The National Bank of Kazakhstan is trying to keep the tenge rate to the dollar within the given currency corridor.

Edited by CN

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