Transparent indicators to stabilize vegetable prices in the off-season

On Saturday, January 21, First Vice Minister of Trade and Integration Arman Shakkaliyev held a meeting on price restraint for socially important food products (SIFP).

According to the Trade Committee, last week there was an increase in prices mainly for vegetables. In particular, onion prices increased by 5.5%, carrots – by 1.3%, potatoes – by 1%.

Vice Minister of Agriculture of the Republic of Kazakhstan Baglan Bekbauov presented the results of the ongoing work on the formation of reserves of regional stabilization funds and current reserves in the field. To meet the needs of the population in vegetables, 20.4 thousand tons of onions, 23.5 thousand tons of carrots, 17.1 thousand tons of cabbage were purchased. According to akimats, about 78.5 thousand tons of potatoes have already been contracted in the regions for this period, including 36 thousand tons under forward contracts, 42.5 thousand tons under "revolving schemes". In May-June 2023, the demand of the domestic market will be met through the contracting of early potatoes of the Turkestan region and imports from southern countries.

«o ensure the purchase of early vegetables, the Ministry of Agriculture of the Republic of Kazakhstan jointly with the Department of Agriculture of the Turkestan region organized a field meeting, where representatives of all regions participated, following the results of the regional SEC concluded agreements of intent with Kazakhstani producers of early vegetables», - the Vice Minister of Agriculture of the Republic of Kazakhstan said.

Thus, the reserves formed from the harvest of 2022 will make it possible to meet the needs of the regions until the end of April 2023, in the price range "purchase price + storage costs". This will smooth out sharp price fluctuations in the off-season, and, starting from May to June, fresh crops will be available at retail at prices lower than in the same period last year. An agreement has already been signed with Tajikistan on the guaranteed supply of 6 thousand tons of early onions in the off-season. Similar contracts are being worked out with Pakistan and Uzbekistan.

«To form indicative prices for vegetables for the upcoming off-season, last week we sent calculations to all regions taking into account the following factors: data from the Bureau of National Statistics on vegetable prices as of December 27, 2022, the purchase price, storage, transportation costs and trade allowance. This is the calculation formula for indicative prices for the 2022 harvest. The formula "market price + trade premium" should not be applied to this crop. This is the only way we will be able to predict and form an acceptable inflation corridor. Now the regions need to form indicative prices for vegetables as soon as possible, until the middle of next week. In the model rules of the Ministry of Agriculture for the implementation of price stabilization mechanisms for socially significant food products, everything is clearly spelled out in which cases the stabilization funds work, and when interventions are carried out - all on the basis of price monitoring and indicative data. But if you don't have any indicatives, how will you work? - Arman Shakkaliev summed up.

Following the meeting, the First Vice Minister of Trade and Integration instructed all regions, together with the Akimat of the Turkestan region, to work on concluding forward contracts with producers of early vegetables within 5 days.