1. Agricultural Trade in Central Asia: Trends and Policies Kamiljon Akramov IFPRI Roman Mogilevskii University of Central Asia ReSAKSS-Asia conference, Siem Reap, Cambodia, 25 September 2013

2. Contents The role of trade in food supply Trends in agricultural trade in Central Asia Agriculture-related trade policies Recent and anticipated policy changes and their impact on agricultural trade 3. Trade and Food Supply Agriculture is export-oriented in Uzbekistan and Kazakhstan and much less so in Kyrgyzstan and Tajikistan Imports of food are very important in all countries but Uzbekistan 21% 7% 8% 32% 28% 23% 19% 9% 0% 5% 10% 15% 20% 25% 30% 35% Kazakhstan Kyrgyzstan Tajikistan Uzbekistan %oftotaloutputofagriculture andfoodindustry Contributionof trade intosupply of and demandfor agricultural products andfood Agrifood exports Agrifood imports 4. Trade and Food Supply (2) Kyrgyzstan and Tajikistan are critically dependent on imports of staple food 0% 20% 40% 60% 80% 100% Supply Demand Supply Demand Kyrgyzstan Tajikistan Grain balance, 2012 Domestic production Imports Domestic consumption Exports 5. Trends in Agricultural Trade 0% 3% 6% 9% 12% 0.0 0.6 1.2 1.8 2.4 3.0 3.6 4.2 4.8 2000 2012 2000 2012 Exports Imports BillionUSD Kazakhstan Trade value (lhs) % of total exports/imports (rhs) % GDP (rhs) 0% 4% 8% 12% 16% 20% 0 200 400 600 800 1000 2000 2012 2000 2012 Exports Imports MillionUSD Kyrgyzstan Trade value (lhs) % of total exports/imports (rhs) % GDP (rhs) 0% 7% 14% 21% 0 250 500 750 2000 2011 2000 2011 Exports Imports MillionUSD Tajikistan Trade value (lhs) % of total exports/imports (rhs) % GDP (rhs) 0% 10% 20% 30% 40% 50% 0 800 1600 2400 3200 4000 2000 2010 2000 2010 Exports Imports MillionUSD Uzbekistan Trade value (lhs) % of total exports/imports (rhs) % GDP (rhs) 6. Trends in Agricultural Trade (2) Agricultural trade has dramatically grown in all countries of the region for the last 10-12 years Importance of agricultural exports declined everywhere but in Tajikistan Share of agricultural imports in total imports has been almost constant in KAZ, KGZ and UZB and increased in TJK Role of agricultural trade in the economies (% GDP) mostly declined/stagnated except imports in KAZ and TJK 7. Structure of Agricultural Exports Key agricultural exports are wheat and flour (KAZ) and cotton (UZB) Other important exports in the region are fruits and vegetables Grain and flour 71% Other products 29% Kazakhstan- Exports Dairy products 9% Vegetables 33% Fruits 21% Prepared foods 11% Cotton 12% Other products 14% Kyrgyzstan- Exports Vegetables 6% Fruits 12% Cotton 78% Other products 4% Tajikistan- Exports Vegetables 9% Fruits 22% Cotton 57% Inputsfor agriculture 6% Other products 6% Uzbekistan- Exports 8. Structure of Agricultural Imports All countries import prepared foods, grain and flour (except KAZ), meat (!), and inputs/fertilizers (except UZB) Grain and flour 30% Prepared foods 33% Other products 37% Uzbekistan- Imports Meat 6% Grain and flour 41% Prepared foods 31% Other products 22% Tajikistan- Imports Meat 9% Grain and flour 17% Prepared foods 41% Inputsfor agriculture 8% Other products 25% Kyrgyzstan- Imports Meat 8% Dairy products 9% Vegetables 4% Fruits 11% Prepared foods 43% Inputsfor agriculture 6% Other products 19% Kazakhstan- Imports 9. Geography of Agricultural Trade Central Asian countries are important partners to each other for agricultural trade (much more than for non-agri trade) 0% 20% 40% 60% 80% 100% Agri trade Non-agri trade Agri trade Non-agri trade Agri trade Non-agri trade Agri trade Non-agri trade Kazakhstan Kyrgyzstan Tajikistan Uzbekistan Exports CA neighbors Russia China EU Other countries 0% 20% 40% 60% 80% 100% Agri trade Non-agri trade Agri trade Non-agri trade Agri trade Non-agri trade Agri trade Non-agri trade Kazakhstan Kyrgyzstan Tajikistan Uzbekistan Imports CA neighbors Russia China EU Other countries Russia is important partner for all countries of the region both for exports and imports China and EU (very important for non- agri trade) are significant markets for cotton exports only 10. Agricultural Trade Policies in Central Asia MFN tariffs are rather high Free trade regime for each other, Russia and other FSU Weighted tariffs are much lower due to concentration of agri trade on neighbors and Russia 0 5 10 15 20 Kazakhstan Kyrgyzstan Tajikistan Uzbekistan Tariifsfor agricultural goods Simple average MFN applied Trade weighted average 11. Agricultural Trade Policies in Central Asia (2) Non-tariff measures are very important for regional agricultural trade Sanitary and phytosanitary measures are used often, especially by Russia and Kazakhstan (after creation of the Customs Union of Belarus, Kazakhstan and Russia) Borders between these countries are thick border crossing is expensive, time-consuming and unpredictable Informal trade in agricultural goods is widespread, traders look for and find bypass routes to avoid formal trade restrictions Re-export schemes (e.g. UZBKGZKAZ for fertilizers or RUSKGZTJK for gasoline) are used frequently 12. Policy Changes in Central Asia Changes: creation of the Customs Union (CU) of BKR and WTO accession of Russia, Tajikistan Expected WTO accession of Kazakhstan Expected CU accession of Kyrgyzstan and, later, Tajikistan No significant impact of the CU creation on agricultural trade in Kazakhstan and other CA countries Complicated assessment of possible CU accession of Kyrgyzstan due to informality of key economic activities Gains better access to major markets for KGZ agricultural and food products (conditionally SPS issues addressed) Losses reduction in re-export business with implications for population incomes, consumer prices Unclear prospects for labor migration key issue also for Tajikistan