Dear Askar Uzakpaevich!
Dear colleagues!
(Slide 2)
From the beginning of October to November 12, prices for NWT increased by 1.1% (from the beginning of the year by 9.7%).At the same time, despite the harvest season, there is about a ten percent increase in prices for a number of goods.
Thus, buckwheat - by 46.3%, and since the beginning of the year by 62.9% (the maximum growth since the beginning of the year: Almaty 121.3% -343 tenge, Karaganda 94.3% - 239 tenge, Nur-Sultan 79.7% - 275 tenge);
rice - by 0.7%, and since the beginning of the year by 32.3% (maximum growth: Aktobe 62.4% - 307 tenge, Atyrau 54.9% - 319 tenge, Uralsk 40.8% - 300 tenge.);
flour - by 10.2%, and since the beginning of the year by 27.8% (maximum growth: Kostanay 49.5% - 148 tenge, Kokshetau 46.5% - 148 tenge, Aktobe 43.8% - 128 tenge);
For reference:potatoes - 13.5%, onions - 13.0%, bread - 12.9%, chicken meat - 12.9%, butter - 10.6%, eggs - 6.7%, carrots - 5.7%, milk - 3.9%, kefir - 3.2%, cabbage - 1.9%, sunflower oil - 0.9%, salt - 1.1%.
The decline in prices from October to November is observed for the following products:sunflower oil by 0.4%, potatoes by 3.4%, carrots by 4.5%, onions by 5.8%, cabbage by 7.7% and sugar by 7.9%.
The maximum increase in prices for socially important food products since the beginning of the year has been observed
in Atyrau (13.5%), Pavlodar (12.0%) regions, Nur
-Sultan (11.8%), Zhambyl and Aktobe (11.4%) regions.
Dear Askar Uzakpaevich, in accordance with the instructions of the Head of State, I ask you to bring to justice the deputy akims of these regions.
(Slide 3)
At the same time, I note that the threshold values are exceeded by more than 15% in all regions, mainly for vegetables, meat, bread and buckwheat.
The largest number of socially significant food products exceeding the threshold values was recorded in the cities of Kyzylorda, Shymkent and Turkestan – 6 goods, these are vegetables (cabbage, onions, carrots), flour, bread and beef.
In the cities of Almaty, Aktobe, Akmola, North Kazakhstan and Zhambyl regions – 5 goods.
In order to take operational measures to stabilize prices for NWT during the off-season and smooth out possible speculative jumps, back in May 2018, akimats were given the function of regulating prices for NWT.
However, today in practice this function is not used by akimats.
For reference: On August 1, 2018, the relevant Rules governing the procedure for making decisions by akimats on the effective regulation of prices for NWT were approved.
(Slide 4)
AN ANALYSIS WAS CARRIED OUT TO DETERMINE THE CAUSE OF THE PRICE INCREASE
Firstly, one of the main reasons for the price increase remains the availability of a large number of distributors with different trade margins and other inefficient intermediaries, non-compliance with storage conditions, lack of established delivery channels.
As a result, there is a significant increase in the value of individual goods.
Secondly, the growth of exports. This increases the prices of imported goods.
So, this year in the country buckwheat has significantly risen in price due to a reduction in acreage by 30%. In addition, there is also a growth rate in the RF, due to the minimum harvest in 5 years.
The increase in rice prices is observed due to the increased demand for Kazakh rice from Uzbekistan and Turkmenistan. Thus, exports to these countries increased 22 times.In Russia, rice prices have increased by 14%, that is, in our currency from 368.5 tenge/kg to 420.2 tenge.
For reference: After the introduction of the program for the development of farming in Uzbekistan, under which the population is given preferential loans for the purchase of livestock from other countries, the demand from Uzbek farmers has increased significantly, offering prices 5-10% higher than the market, which is one of the reasons for the increase in prices for meat products. So, in January-September of this year, Uzbekistan imported about 90 thousand live cattle, which is almost 10 times higher compared to last year (9.2 pcs.).
However, when analyzing interregional supplies of goods, we are faced with the fact that akimats often do not know what is produced in their regions and where they are imported from.
(Slide 5)
As the analysis shows, the correlation for most products is more than 90%.Due to the openness of trade borders within the EAEU, against the background of rising prices in Russia, both our prices and export volumes are growing.
At the same time, prices for all food products in Russia are significantly higher than ours, which pushes intra-Kazakhstan prices up.
(Slide 6)
In order to curb prices for socially important food products and gradually eliminate the causes of their growth, the Ministry of Trade and Integration, together with the Ministry of Agriculture and local executive bodies, is working.
Various price containment mechanisms have been developed (all-market mechanisms used in world practice).
The main mechanism for price stabilization today is the activity of the Stabilization Funds (the Ministry of Agriculture approves the Standard Rules for the activities of the Stabilization Funds, the MIO approves the regional rules and implements and manages the Stabilization Funds).
The volume of foodstuffs is only 45 thousand tons, which is less than 3% of the population's needs in the regions. At the same time, despite the low volume of purchases, 12 regions out of 17 hold 2.7 billion tenge allocated to stable funds on deposits in STB. In fact, this money is for the maintenance of SECS in the regions.
For reference: flour of the 1st grade – 19.8 thousand tons, potatoes - 8.5 thousand tons, sugar - 8.0 thousand tons, carrots - 2.0 thousand tons, onions - 2.4 thousand tons, sunflower oil - 1.0 thousand tons, buckwheat - 1.0 thousand tons, rice - 0.2 thousand tons.
For a full impact on the pricing of socially significant food products, it is necessary to increase the purchase of stabilization funds to 15-20% of the population's needs.
In addition, there are alternative mechanisms to curb prices that do not require extensive budget funding.
Firstly, a "revolving scheme" is being implemented - preferential loans to retail chains with counter obligations to sell socially significant food products at a fixed price.
This year, the "turnaround scheme" is being implemented in four Pilot regions.
Thus, in Almaty, an agreement was signed with Magnum LLP for
1.5 billion tenge, but regional rules have not yet been approved, which jeopardizes the work of the akimat to stabilize prices.
In the cities of Nur-Sultan, Kyzylorda and Kostanay, despite the available budgetary funds (SEC funds), contracts have not yet been concluded with retail chains and the akimats have not carried out real work to reduce prices.
Also, we note that 7 regions have not yet approved regional rules, and therefore they cannot use either a "revolving scheme" or a simplified mechanism for the operation of Stable Funds.
Secondly, given the shortage of modern format warehouses, the SEC has the ability to carry out forward purchases of NWPT.
Given that the main reason for the price increase are resellers, it is important for us to create a modern infrastructure for trade and storage of goods.
In this regard, the construction of wholesale distribution centers has begun, which will provide services to producers for the storage, packaging, marketing and transportation of food.
For example, the construction of a wholesale distribution center in Karaganda is being completed today.
To date, similar facilities are being created in Zhambyl, Pavlodar, North Kazakhstan, East Kazakhstan and West Kazakhstan regions, but they must meet the standards of the ORC of the Karaganda region.
For reference: ORC is one of the indicative infrastructure facilities with a design capacity: climatic warehouses - 5 thousand sq.m., general temperature warehouses - 10 thousand sq.m., cross-docks - 6.6 thousand sq.m., retail space - 42 thousand sq.m.
On November 16 of this year, we also legislated the concept of a wholesale distribution center and the competence of the Ministry of Trade and Integration to approve requirements for them.
Now we are actively working out new requirements for wholesale distribution centers together with the Ministry of Agriculture and the Asian Development Bank.
An opportunity has been created to obtain a loan for the construction of wholesale distribution centers within the framework of the Economy of Simple Things and to receive subsidies under the DKB-2020.
Also, the Asian Development Bank, as part of the technical assistance provided to the Government, is conducting preparatory work to develop a feasibility study for the construction of wholesale distribution centers.
This feasibility study will become a standard project of wholesale distribution centers for all regions.
In order to increase the investment attractiveness of wholesale distribution centers, we propose to attribute the construction of the ORC to investment priority projects.
According to preliminary calculations, the volume of required investments for the construction of a regional ORC (depending on the volume and types of production in the region and the population) is about 5.8 billion tenge (for 16 ORCS – 121.9 billion tenge).
Additionally, we would like to report on the experience of some European countries, such as France and Spain:
- wholesale markets have been created with state participation of more than 50%;
- control perimeters have been created for wholesale food markets, where wholesale trade is carried out on the basis of a special permit.
(Slide 7)
ON THE ONLINE PLATFORM
At the end of November this year, the Price Scanner mobile application will be launched, developed by BTS Digital LLP in a pilot mode in Karaganda.
The Price Scanner functionality will allow you to see the cost of goods and reviews of their quality in all stores in the city, as well as compare and buy goods at the lowest price.
In the future, the Price Scanner mobile application will be launched in other regions.
Thank you for your attention!