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Food Contract Corporation: Azerbaijan's cancellation of VAT on grain to impact Kazakh wheat

Business Materials 7 December 2010 17:14 (UTC +04:00)

Kazakhstan, Astana, Nov. 7 / Trend A. Maratov /

The Kazakh Food Contract Corporation does not plan to supply grain to Azerbaijan later this year or in 2011 as the country must ensure its food security and stabilize flour and bread prices.

The Food Corporation said it does not plan to supply grain to Azerbaijan even though the country exempted grain and flour importers from VAT until Aug. 1, 2011.

"We have an obligation to ensure food security in Kazakhstan to stabilize flour and bread prices," Commercial Department Director Kazbek Omarov told Trend. "All of our resources will be directed toward this end."

He added that the Food Corporation ceased grain deliveries to Azerbaijan in August when the issue of stabilizing "major social product" prices - prices on bread and flour - was raised. The company has supplied about 150,000 tons of wheat to the Azerbaijani market since early 2010.

"However, local companies supply grain to Azerbaijan, which is our permanent importer," Omarov said.

The director added that today the Food Corporation supplies 220,000 tons of grain to Kazakh regions according to a memorandum signed with Akims, KazAgro and the Grain Union.

He ensured that other private companies will deliver grain to Azerbaijan - and possibly through the Baku Grain Terminal, which belongs to the fFood Corporation on a parity basis.

Omarov said Azerbaijan's decision to abolish VAT on grain and flour will have a positive effect on the amount of grain supplied by Kazakh private companies. It may also lead to lower prices on bread and flour on the Azerbaijani domestic market, he said.

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