Kazakhstan may suspend grain exports altogether or introduces export duties to tame domestic inflation, the Central Asian nation's Prime Minister said on Monday. Kazakhstan, Central Asia's top grain producer which had set its sights on becoming the world's fifth-largest grain exporter this season, has threatened to introduce export curbs to tame double-digit inflation.
"I have ordered the agriculture ministry, together with the industry ministry, to look into the possibility of introducing an grain export duty or suspending exports altogether," Prime Minister Karim Masimov told a government meeting. "Either this or that. Please submit your proposals by the end of the week."
Officials reassured exporters last month that Kazakhstan would not limit exports following a deal with local producers and traders to ensure at least 1.2 million tonnes of wheat are supplied to the domestic market at fixed prices.
But a continuing rise in global prices has alarmed Kazakh policy makers, concerned with booming bread prices and a threat of possible shortages across the steppe nation of 15 million.
"The global trend is quite alarming. Global prices are rising relentlessly," Masimov said. High world prices have made exports more profitable than domestic sales, making it tougher for millers to secure wheat.
A rise in grain prices and temporary shortages of bread last year helped propel Kazakh inflation to double digits. Annual consumer price inflation in Central Asia's biggest economy was 18.8 percent in 2007 compared with 8.4 percent in 2006. Kazakhstan harvested 20.1 million tonnes of grain last year.