The situation in Ukraine threatens the dairy industry in Kazakhstan

The Russian-Ukrainian conflict has led to numerous sanctions against Russia. This had a significant impact on business in the neighboring state and could not bypass the Kazakh side. Thus, today, milk producers fear for the survival of the industry in Kazakhstan, reports World of NAN.              

Stepan Ten, general director of Bek+ noted that there are factors that affect the dairy industry in Kazakhstan. The first is the supply of spare parts of equipment and veterinary drugs from Russia to Kazakhstan. The second is the weakening of the ruble against the tenge. 

"Domestic farmers mostly depend on equipment, antibiotics, premixes, feed additives and seeds produced in Russia, Ukraine and European countries. These goods used to go mostly through Moscow. Now they are not supplied to Moscow and Kazakhstan respectively. For example, now we can't get two cars of corn seeds from Ukraine. We still have stocks of veterinary medicines in our farm," explained Stepan Ten. 

Also, in his opinion, the falling ruble could lead to the fact that Russian milk will cost cheaper than the Kazakhstani milk. Before the fall in the exchange rate, the cost was equal.

"Now I think that the cost of milk in the Russian Federation will be cheaper. In this case, domestic milk may be pushed off the shelves, which will affect the potential for development of the industry," Stepan added.

It would seem that Kazakhstan will finally get cheaper milk, and that's good for the consumer. But it really isn't. According to the farmer, the low cost of milk may cause Kazakh dairy farms to halt operations. Later the price of milk may come back, but the previous production volume can't be established at once.

"It will not be possible to increase milk production quickly. A dairy farm is not a meat grinder that can be turned on and off, it's a long-term process that can go on for months," Stepan added.

Thus, from one side dairy farmers will be pressed by the low cost of milk from Russia, and from the other side the uncertainty about the delivery of components necessary for milk production. If restrictions will continue, the Kazakhs must find a logistics chain, through which everything will be imported from third countries. Otherwise, the survival of the dairy industry in the country will be an issue.