Representatives of the grain and flour industries of Uzbekistan and Kazakhstan expressed concern at the Uzbekistan-Kazakhstan Business Forum in Tashkent. The main issues concerned the reduction of VAT refunds for Uzbek traders importing Kazakh grain, as well as the sale of counterfeit flour under Kazakh brands in Uzbekistan and Afghanistan.
Uzbekistan imports about 4 million tons of grain from Kazakhstan annually. One Uzbek entrepreneur working in this sector reported that his company and its partner import approximately one million tons each per year.
Since March of this year, grain exporters to Uzbekistan have faced a fivefold reduction in VAT refunds—from 100% to 20%. A ministry representative responsible for the financial portfolio on the Uzbek side confirmed that this issue was discussed with colleagues from Kazakhstan.
He noted that many entrepreneurs from Kazakhstan raised this problem. Discussions took place at the Ministry of Agriculture and with members of parliament, and were presented to Deputy Prime Minister Serik Zhumangarin. As a result, it was decided to revert to the mechanism that was in place last year before these changes were introduced.
According to the official, authorities are currently working on the legal wording of this mechanism, including the question of its retroactive application to the current year. The final decision will be made by parliament.
He added, 'A new parliament is currently being elected, and the final decision will be made there. Therefore, we need to wait a little longer. The government's position is generally to return to the previous mechanism, but the details have not yet been finalized.'
Kanat Sharlapayev, Chairman of the Presidium of the National Chamber of Entrepreneurs 'Atameken' of Kazakhstan, summarized the situation. He stated that the Ministry of Economy, tax authorities, and the Ministry of Agriculture officially agreed to restore the former mechanism. Now, a vote by parliament members is required, which is expected in September. In his experience, if three state bodies agree and the National Chamber supports it, the chances of approval are high.
From the Kazakh side, it is noted that the country ranks sixth or seventh globally in grain exports and second in flour exports. The production capacity for wheat processing in the country is estimated at about 11 million tons, of which 4–5 million tons are currently processed. Approximately 200–300 flour mills operate in Kazakhstan, producing up to 4 million tons of flour annually; half of this product goes to the domestic market, and the other half is exported.
Forum participants also raised the issue of counterfeit flour sold in Uzbekistan and Afghanistan under the brands of Kazakh producers. A industry representative emphasized that the ongoing problem with such products requires further work, including strengthening border control in Uzbekistan and Afghanistan.
The discussion concluded that flour is often repackaged in Uzbekistan under a Kazakh brand before being sent to Afghanistan. Afghan traders reportedly request Kazakh packaging due to its reputation in the market. Participants noted that the quality of the repackaged product may differ from the original, creating reputational risks for Kazakh producers among end consumers.
At the end of the discussion, the parties agreed to appoint responsible representatives for the flour production sector to continue working on issues of pricing, quotas, and brand protection.
Uzbekistan is being considered as a potential fuel supplier for Kyrgyzstan. The head of the Kyrgyz cabinet, Adylbek Kasymaliev, stated that the republic is capable of supplying its neighboring country with up to twenty thousand tons of its products monthly.
According to Kasymaliev's information, negotiations took place with the Prime Minister of Uzbekistan, Abdullah Aripov, regarding this issue. Currently, Kyrgyzstan imports over 90% of the required fuel.
Against the backdrop of reduced purchasing opportunities in Russia, the authorities of Kyrgyzstan are actively seeking alternative partners, among whom Uzbekistan, as well as Belarus, China, and Azerbaijan, are mentioned. However, there is currently no information about the signing of a contract or the approximate timeline for the start of supplies from Uzbekistan.
Previously, an agreement was reached between Uzbekistan and Kyrgyzstan on the creation of an Interstate Council and increasing bilateral trade turnover to two billion dollars.
