Kazakhstan offers Azerbaijan to intensify agricultural products’ supply, processing (Exclusive)

Business Materials 11 November 2017 16:52 (UTC +04:00)

Baku, Azerbaijan, Nov. 11

By Gulgiz Muradova – Trend:

It is necessary to intensify regional ties in the sphere of agricultural supplies and processing between the western regions of Kazakhstan and Azerbaijan, Deputy Energy Minister of Kazakhstan Magzum Mirzagaliyev told Trend.

Moreover, according to available data, Azerbaijan forecasts real growth of the agricultural sector of the economy by 4.9 percent, said the deputy minister.

“In our opinion, this will lead to positive results pf cooperation, including an increase in trade turnover,” noted Mirzagaliyev.

He said that Azerbaijan’s Azersun Holding started the establishment of a center for processing agricultural products in the second half of 2017. The company intends to invest about 20 million euros in this project.

“This is the second logistics project of Azersun Holding in Kazakhstan. In 2016, a logistics center for the reception and storage of agricultural products delivered by Azerbaijan was built on the territory of the Aktau Sea Port free trade zone. Azersun Holding’s direct investments in the construction of the logistics center amounted to about 20 million euros,” noted the Kazakh official.

Meanwhile, the deputy minister noted that the cooperation in agricultural sphere between Kazakhstan and Azerbaijan, based mainly on the supply of grain, has significantly decreased in recent years.

“At the same time, according to available data, Azerbaijan’s annual deficit in wheat totals about 1.7 million tons. In this regard, in order to resume the supply of Kazakh grain to the Azerbaijani market, we believe it is possible to study this issue as part of the intergovernmental commission, the next meeting of which is scheduled before the end of 2017 in Baku,” said Mirzagaliyev.

He noted that the share of Kazakh grain in the Azerbaijani market was about 70 percent until 2014.

“However, at present, the supply of this product to the Azerbaijani market has decreased due to some objective reasons. Earlier, Azerbaijan purchased from Kazakhstan more than one million tons of grain per year, which brought profit to Kazakhstan in the amount of more than $260 million. Grain worth more than $6 million was bought in 2016,” added the deputy minister.

According to local experts, this situation has arisen as a result of the high cost of Kazakh grain in recent years, as well as in connection with the cancellation of compensation of transportation costs for exporters of Kazakh grain, said the official.

According to expectations of the Azerbaijani government, the volume of production of cereals and legumes will total 2.98 million tons in 2017. Their production will grow by 0.3 percent in 2018 as compared to the forecast for 2017 and will amount to 2.99 million tons.

The production of cereals and legumes is expected to grow gradually in Azerbaijan and it will reach 3.26 million tons in 2021.