According to EastFruit analysts, in 2022, Kazakhstan exported more than 100 000 tonnes of onions for the first time. Meanwhile, the country remains a major net importer of onions with an average annual negative trade balance of 84 000 tonnes on average over the past 5 years.
Why does Kazakhstan import even more onions, while exporting huge volumes of them?
If we analyze the dynamics of foreign trade in onions of Kazakhstan, we can find a trend – the volume of trade is steadily growing. In other words, we see both an increase in imports and an increase in onion exports.
The annual increase in the volume of foreign trade in onions in Kazakhstan amounted to an average of 29 000 tonnes over the past 5 years or 11.9%. In 2022, Kazakhstan’s onion foreign trade volume reached a record 316 000 tonnes, almost double the trade volume recorded five years ago.
“Kazakhstan succeeds in using its advantageous logistical position, gradually becoming a trade hub for the supply of products from Central Asian countries to markets that may be most interested in them. Under the sanctions imposed against Russia by most of the developed countries, Kazakhstan remains one of the few countries that maintain active trade relations with it. Another advantage of Kazakhstan is its relatively liberal trade and business regimes, which allow it to concentrate the trade flows of the region, earning both on imports and exports,” explains Andriy Yarmak, economist at the Investment Center of the UN Agriculture and Food Organization (FAO).
According to The Global Economy, in terms of the business freedom index, Kazakhstan is the leader of the region by a wide margin, being 68th globally. Neighboring countries are below the hundredth position in the ranking: Uzbekistan – 102, Tajikistan – 110, Kyrgyzstan – 114, and Turkmenistan – 155.
Notably, over the past 5 years, Kazakhstan has exported large wholesale volumes of onions to 33 countries worldwide and imported from only 13 countries. Only 6 countries on the list of onion suppliers to Kazakhstan supplied more than 100 tonnes of onions there over the past 5 years, and only 3 countries supplied more than 1 000 tonnes per year. It is easy to assume that these three countries accounting for 99% of all onion imports in Kazakhstan over the past 5 years are the main sources of onions for re-export.
From which countries does Kazakhstan import onions?
The three main suppliers of onions to Kazakhstan are Uzbekistan, Tajikistan, and Iran. However, Iran accounted for only about 1% of onion imports in Kazakhstan over the past 5 years, so we can assume that Kazakhstan imports the main volumes of onions only from Uzbekistan and Tajikistan. They do not have a border with Russia and are forced to either send their products in transit through Kazakhstan or sell to traders from Kazakhstan, who then resell Tajik and Uzbek onions to Russia, adding their own margin. At the same time, Russia has no specific requirements for a system for tracking the origin of products, unlike the developed countries of the world, so this is easily done.
In any case, Kazakhstan benefits directly, either from the transit or re-export of onions. This is also beneficial for suppliers from Uzbekistan and Tajikistan – after all, they do not have to deal with complex logistics and bear additional risks of product damage.
Where does Kazakhstan export onions?
It may come as a surprise to many that Russia is not the only country where Kazakhstan exports and re-exports onions. Noteworthy, besides reselling onions from other countries, Kazakhstan exports onions grown mainly in the southern regions of Kazakhstan.
Exports to Russia account for less than half – about 43% of all onion exports in recent years. However, it is still, by a wide margin, the main onion market for Kazakhstan.
The other two largest onion importers from Kazakhstan are Afghanistan and Uzbekistan. While Afghanistan imports large volumes of onions quite regularly – from 3 000 to 12 000 tonnes, Uzbekistan buys onions in Kazakhstan only provided there is a temporary shortage of products in the country. For example, this happens, if onions freeze during storage, as it was in the winter of 2023, or if a new crop of early onions is delayed and onion stocks from the previous year’s harvest are insufficient.
Pakistan has moved into the ranking of the top onion importers from Kazakhstan over the past 5 years, mainly because floods destroyed a significant part of Pakistan’s onion crop in 2022. Therefore, in 2022, Pakistan imported almost 40 000 tonnes of Kazakh onions and became the main importer. However, in the long term, Pakistan is more of a competitor than a market for Kazakhstan.
What’s notable, one EU country, Poland, has also entered the Top-5 buyers of onions from Kazakhstan. By the way, Poland is also known as a major trading hub located between Western and Eastern Europe. Like Kazakhstan, it actively and successfully uses this logistical position, therefore, most of the onions imported by Poland from Kazakhstan in 2018-2020 and in 2022, most likely, found sales in the markets of other countries. Thus, it can be assumed that Poland has already become the second intermediary country for part of onions and that some batches of onions from Tajikistan ended up, for example, in Serbia as Polish onions, previously imported to Poland as onions from Kazakhstan.
Also quite regularly, onions from Kazakhstan are supplied to Ukraine, Turkmenistan, Georgia, Belarus, Mongolia, and Iraq.
It is possible that we will see the expansion of the geography of onion exports from Kazakhstan in 2023, despite the fact that for some time the government of the country was even forced to impose a ban on the export of onions due to the threat of its shortage in the domestic market. However, the ban on the export of onions has recently been lifted.
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