The Kazakh government has moved to ban grain exports until a new harvest in September 2008. Flour exports, however, have not been banned.

The government said the decision was necessary for ensuring food security in the country because grain is being currently exported at a rate of 1.1m-1.4m tonnes a month.

Over 8m tonnes of grain has been exported from the 2007 harvest, Prime Minister Karim Massimov’s press service said on 15 April.

Kazakhstan’s stocks of grain stood at 8.1m tonnes as at 10 April 2008, including 4.7m tonnes of bread wheat. According to a press release circulated by the prime minister’s press service, Kazakhstan has only one month worth of exports left in its grain stocks.

However, it remains unclear what grain producers will do with their grain allotted for export. The government has already reached an agreement with them on purchasing 1.2m tonnes for the domestic market “at fixed prices”. The government suggested that exporters will supply their grain to local mills to process it and export flour but the question is whether Kazakhstan has enough capacities to process grain.

What is clear is that the ban will only temporarily delay a hike in prices for grain products and once the ban is lifted prices of staples will jump even higher and harm the population to a greater extent. On the other hand, the ban may fail to help curb prices but lead to food shortages because food companies would not want to lose profits from selling products at lower prices. The export ban will also hurt the neighbouring countries ( Kyrgyzstan, Tajikistan and Uzbekistan) and they are not in a position to offset a potential food crisis without help from the outside, for example, Kazakhstan or Russia.

Kazakhstan reaped a bumper harvest of about 17m tonnes of grain this marketing year, of which 8m to 9m tonnes was expected to be exported.