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Grain and Flour Market in Kyrgyzstan and Mongolia

12 June 20177 min reading

Grain production in Kyrgyzstan is primarily comprised of wheat and corn. According to data of USA Department of Agriculture, Foreign Agriculture Service (USDA FAS), Kyrgyzstan which produces 700,000 tons wheat in 2015/16 season is expected to remain at the same level in 2016/17. In Mongolia, wheat is the most produced and the most important product. From 2011 to 2013, production of wheat fluctuated between 368,000 and 465,000 tons, and it reached 489,000 tons in 2014. Production of oat and barley in Mongolia varies between 4 and 18 tons. 

ulke90Although grain production in Kyrgyzstan is mainly dominated by wheat and corn, in Mongolia, wheat is the primary product in production and consumption of grains. Mongolia is not a suitable territory for growing most plants, due to harsh climate conditions. The main agricultural products grown in Mongolia are corn, wheat, barley and potato.

The milling industries of both countries are dominated by wheat. Similarly, these two countries address their needs for consumption by importing wheat flour. Kyrgyzstan has more than 50 milling facilities producing high quality, first and second class wheat flour. While large mills produce 200-500 tons of flour per day, medium-scale businesses produce 20-100 tons, and small enterprises produce less than 10 tons per day.

In Mongolia, there are 72 milling facilities with a production capacity of 532,800 tons of wheat flour per year, until 2009. The mills are located in Ulan Bator, and other 15 cities. It is estimated that 15-25% of the flour need is supplied by large milling facilities.

PLACE OF KYRGYZSTAN IN GLOBAL GRAIN PRODUCTION Grain production in Kyrgyzstan is primarily comprised of wheat and corn. According to data of USA Department of Agriculture, Foreign Agriculture Service (USDA FAS), wheat production in Kyrgyzstan was recorded at 875,000 tons in 2013/14, and 675,000 tons in 2014/15. Wheat production reached 700,000 tons in 2015/16, and it is expected to remain at the same level in 2016/17.

Another important product produced by Kyrgyzstan is corn. Kyrgyzstan produced 450,000 tons of corn in 2013/14 and 2014/15, and the production was increased to 600,000 tons in 2015/16. In 2016/17, Kyrgyzstan is expected to produce 450,000 tons of corn. Barley is another important grain grown in this country. Kyrgyzstan produced 325,000 tons of barley in 2013/14, 225,000 tons in 2014/15, and it is estimated to produce 350,000 tons in 2015/16 and in 2016/17.

The main product in grain consumption in Kyrgyzstan is wheat. According to USDA data, Kyrgyzstan consumed 1,3 million tons of wheat in 2013/14 and 2015/16, and it is estimated to consumed 1,3 million tons in 2016/17. In terms of consumption of corn, the numbers are estimated around 450,000 to 550,000 tons from 2013/14 to 2015/16. The estimated consumption amount in 2016/17 is 500,000 tons. Consumption of barley in Kyrgyzstan was around 250,000-350,000 tons from 2013/14 to 2015/16. The estimated consumption amount in 2016/17 is 360,000 tons.

PLACE OF MONGOLIA IN GLOBAL GRAIN PRODUCTION Mongolia produces almost no other grains than wheat. Mongolia is not a suitable territory for growing most plants, due to harsh climate conditions. In terms of production of grains, wheat is the most produced and the most important product. From 2011 to 2013, production of wheat fluctuated between 368,000 and 465,000 tons, and it reached 489,000 tons in 2014. Production of oat and barley in Mongolia varies between 4 and 18 tons.

The grain product that is most consumed in Mongolia is wheat. Consumption of wheat was 438,000 tons in 2013/14, and 517,000 tons in 2014/15. The amount of consumption fell to 466,000 tons in 2015/16. In 2016/17, consumption of wheat is expected to reach 565,000 tons.

KYRGYZSTAN AND MONGOLIA IN GLOBAL TRADE OF GRAIN Kyrgyzstan suffices itself with its corn production, but resorts to imports, particularly to supply wheat. According to USDA data, 546,000 tons of wheat was imported in 2013/14, which rose to 548,000 tons in 2014/15, and to 575,000 tons in 2015/16. It is estimated that the same amount of wheat will be imported in 2016/17.

On the other hand, in Mongolia, imports of grains are primarily based on rice, wheat and oat. Mongolia imported 19,826 tons of rice in 2010, which rose to 33,000 tons in 2012. However, in 2013, the rice imports by Mongolia fell to 23,994 tons. Mongolia imported 56,000 tons of wheat in 2010, and 120 tons in 2013. The country imported 3,000-4,000 tons of oat from 2010 to 2013.

FLOUR INDUSTRY IN KYRGYZSTAN AND MONGOLIA According to the data published on the website “The Logistics Capacity Assessment”, Kyrgyzstan has more than 50 milling facilities producing high quality, first and second class wheat flour. While large mills produce 200-500 tons of flour per day, medium-scale businesses produce 20-100 tons, and small enterprises produce less than 10 tons per day. As large and medium scale mills renovate their production lines and produce first class wheat flour, small mills do not have the technical capacity to improve flour quality. Depending on the market conditions, medium and small scale mills are periodically closed and re-opened. According to the “Market Assessment in Kyrgyzstan” report issued by World Food Program’s Analysis and Nutrition Service in 2013, wheat is imported by a limited number of large companies which are also involved in milling processes. The remaining amount of flour is used for local consumption in cities. Kyrgyzstan suffices itself in terms of corn and barley; however, it has been important wheat for many years. The Import-Dependency Ratio (IDR) score of Kyrgyzstan increased from 14% in 2005/06 to 40% in 2012. This part of the increase in imports of wheat is based on the objective to expand the strategic stocks of the country, which has been significantly on the rise in recent years. A total of 2 million tons of grain is produced in this country, and approximately 45% is used for food, 38% for animal feed, and remaining 17% for other purposes. Approximately 97% of the grains used in food production consists of wheat, which is the most consumed grain in Kyrgyzstan. On the other hand, 50% of animal feed is made up of corn, 30% of wheat and 20% barley.

Wheat is also imported by a series of large companies that are involved in milling processes. However, the number of these large companies is limited. In general, these companies process their flour with another flour with a lower gluten level that is imported from Kazakhstan. Most of this flour is transferred to warehouses and sales points, and thus sold to retailers or directly to end consumers, and distributed to local markets in various cities.

In Mongolia, there are 72 milling facilities with a production capacity of 533,000 tons of wheat flour per year, until 2009. The mills are located in Ulan Bator, and other 15 cities. It is estimated that 15-25% of the flour need is supplied by 2 large milling facilities.

FLOUR TRADE IN KYRGYZSTAN AND MONGOLIA According to the data of United Nations Food and Agriculture Organization (FAO), exports of wheat flour by Kyrgyzstan varied between 39 to 662 tons in 2010-2013. Kyrgyzstan exported 662,000 tons of wheat flour in 2011, and the number plummeted to 39 tons in 2013. Imports of wheat flour by Kyrgyzstan was 55,000 to 140,000 tons in 2010-2013. Kyrgyzstan imported 112,000 tons of wheat flour in 2012, and the number rose to 140,000 tons in 2013. According to FAO data, Mongolia does not export any wheat flour. In Mongolia, where consumption relies on imports, 23,000 to 71,000 tons of wheat flour was imported between 2010 and 2013. Wheat flour imports were at 54,000 tons in 2010, which increased to 71,000 tons in 2011. Wheat flour imports decreased in 2012 and 2013, when the numbers were recorded at 46,000 tons and 23,000 tons, respectively.

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