kazakhstan wheat flour fortification: rapid assessment · kazakhstan wheat flour fortification:...

Kazakhstan Wheat Flour Fortification: Rapid Assessment Date of Mission: October 17 to October 21, 2013 David McKee, GAIN consultant [email protected] Table of Contents A. Executive Summary B. Recommendations and Next Steps C. Flour Sector Review

Summary Wheat flour consumption Wheat production Wheat flour production Wheat flour Exports Capacity of Milling Industry to Fortify Actual Wheat Flour Fortification

D. Regulatory Assessment Summary

Fortification standard Fortification Legislation

Premix supply and distribution Quality control and monitoring Millers association

DRAFT Kazakhstan Wheat Flour Fortification Rapid Assessment

David McKee December 2013

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A. Executive Summary

Because of its importance as a wheat flour supplier to neighboring countries, the significance of Kazakhstan’s wheat milling industry for increasing consumption of fortified flour extends far beyond Kazakhstan’s population of 17 million to other countries with a combined population roughly four times that of Kazakhstan.

The milling industry in Kazakhstan produces about 4 million tons of wheat flour per year. Domestic consumption is 1.8 million tons and exports in 2012 were 2.2 million tons.

Kazakhstan has been the world’s top or number two wheat flour exporting country for several years running, with most exports going to neighboring countries: Uzbekistan, Afghanistan, Tajikistan, Kyrgyzstan, Azerbaijan, Russia and Turkmenistan in order of importance.

Despite years of efforts, partly through regional programs, and a mandatory fortification law, the milling industry in Kazakhstan fortifies a maximum of 20% of flour for domestic

consumption and none deliberately for export with a few small exceptions like WFP tenders.

Nevertheless most of the larger milling companies likely to survive the on-going consolidation of their industry are already technically capable of fortifying their wheat flour for domestic sales or export.

There is likely to be little increase in fortification by mills in Kazakhstan from the current level firstly unless the existing mandatory law is better implemented and enforced; and secondly unless Kyrgyzstan, Tajikistan and other governments pass and enforce their own mandatory flour fortification laws.

According to recent surveys the prevalence of anemia hasbeen declining. This has probably mainly resulted from better diets thank to rises in household income, with a small impact from adequate coverage of fortified flour in just a few regions.

B. Recommendations and Next Steps



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Kazakhstan and Kyrgyzstan should strive for a harmonization of their fortification standard. The most desirable way would be for Kazakhstan to change its standard to require EDTA iron, which has much better bio-availability than electrolytic iron, as in the current Kazakhstan standard. Ideally other countries in Central Asia, particularly Uzbekistan and Tajikistan should change their standard to EDTA iron as well to make it easier for Kazakhstan millers to fortify for export, and international organizations like WFP that procure fortified wheat flour should make the change as well. C. Flour Sector Review

Summary Total wheat flour consumption in Kazakhstan has peaked and may be declining as a result of little population growth and diversification of diets with rising incomes. This has put pressure on mills to export for survival. Flour exports have risen from less than 200,000 tons in 2001 to a peak of 2.3 million tons in 2010. Table: Kazakhstan wheat (millions of tons) Year Production Wheat Exports Flour Exports

2013 16.0 4.8 1.8

2012 9.8 7.4 2.8

2011 22.8 2.9 1.9

2010 9.6 5.0 2.3

2009 17.0 3.2 2.2

2008 12.5 5.0 1.8

2007 16.5 6.2 1.2

2006 13.5 4.2 1.1

2005 11.2 1.9 0.9

2004 9.9 2.6 0.5

2003 11.5 5.2 0.5

2002 12.7 3.9 0.3

2001 12.7 3.0 0.2

Wheat flour consumption



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Key findings

Total annual wheat flour consumption is about 1.8 million tons.

Daily per capita wheat flour is 270 grams based on a population of 17.8 million.

The share of first and superior grade flour consumption has increased steadily to around 80% (?) of total wheat flour.

Bread and increasingly other wheat-based products like pasta are the main source of carbohydrates in the Kazakh diet. No official data is released, but according to industry sources total wheat flour output for domestic consumption by Kazakhstan mills is about

1.8 million tons. Based on a population of 17.8 million, per capita daily consumption of wheat flour is around 270 grams. However an increasing share of the second grade flour goes for animal feed use. This reduces per capita consumption.

There is much higher per capita wheat flour consumption in rural versus urban areas. One source estimated Almaty’s daily flour requirement at 300 tons. Based on a population of 1.6 million this comes out to 180 grams per day, significantly below the national average.

The urban population, which is 55% of the total, consumes mainly square loaves produced at commercial bakeries. A relatively higher share of its wheat based product consumption is in the form of pasta and has been increasing. Urban households also consume flat bread (nan) that is mainly purchased in markets from tandoor bakers.

In rural areas most households bake flat bread in tandoor ovens at home, using flour purchased at local markets. A small percentage of farm households still grindself-grown wheat in village mills to make flour for baking bread at home.

Wheat production Wheat is by far the largest part of the agricultural economy, and is cultivated over 64% of the planted area, accounting for 84% of cereals and pulses planting (USDA). Over 90% (?) of Kazakhstan’s wheat is a spring crop grown on the country’s northern steppes, planted in March and April and harvested in August and September. It is rain fed making the harvest highly variable. National yields average about 1 ton per ha and vary from 0.8 tons to 1.8 tons depending on precipitation. Consequently harvests can vary greatly. The 2011 crop at 22.7 million tons was a record but it was preceded and followed by the two smallest harvests of the last 12 years with 9.6 million tons in 2010 and 9.8 million tons in 2012.The 2013 crop was about 16 million tons.



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Total annual food, seed and industrial consumption of wheat grains in Kazakhstan (USDA data) is about 4.8 million tons meaning there are large surpluses available for export year in and year out, even when drought reduces the crop. The Kazakhstan government uses abundant budget resources from taxes on the energy and mining industries to provide subsidies to wheat production and other agricultural sectors targeted for growth. These mainly take the form of low prices on diesel fuel, seed, fertilizer, and other inputs. Farmers can also get low interest loans to purchase agriculture equipment. Due to the high transport costs of moving surplus wheat to international markets beyond the land-locked countries of Central Asia, the Ministry of Agriculture has been pursuing a policy of diversification of agriculture away from wheat. More planting of feed grains to increase livestock production in feedlots, and of soybeans for poultry has been promoted. Wheat exports Annual exports of wheat have ranged from 1.9 million tons (2005) to7.5 million tons (2011) in the last 12 years. This does not take into account the wheat equivalent of wheat flour exports discussed below. Total exports of wheat and wheat flour reached 11.1 million tons in wheat equivalent in the 2011-12 crop marketing year. Kazakhstan government has provided railroad transport subsidies of $40 per ton to stimulate export of wheat to Baltic and Black Sea ports, and to China. But has dropped these as part of its campaign to obtain WTO membership. Thanks to the large surpluses in some year, Kazakhstan carries over a major part of its crop from one year to the next. The carry over stocks range from 1.5million tons to 6 million tons and are usually in the range of 205 to 25% of the previouscrop. This carryover is significant as a de facto food security reserve for the neighboring countries that depend on Kazakh wheat exports, particularly Uzbekistan, Afghanistan, Kyrgyzstan and Tajikistan. Even when droughts reduced the crop in two out of three yearsto 12 year lows of 9.6 million and 9.8 million tons in 2010 and 2012, the official carryover stocks were 1.5 million and 2.1 million tons going into the harvest in the following year.



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The government of Kazakhstan normally holds the largest share of the carryover stocks. In most bumper crop years the state usually intervenes to buy the non-exportable surplus from farmers at a minimum price. Food Contract Corporation (FCC) is the state-owned enterprise that is responsible for buying up the excess stocks, storing them, and then disposing of them when market conditions are right. MostlyFCC exports the surpluses, often in government to government deals, including Iran. KazAgroHolding is an agency under the Ministry of Agriculture that is an umbrella for a number of state enterprises that serve as conduits of support for wheat production and other agricultural sectors. Food Product Corporation is one of the entities under KazAgroHolding. Significance for flour fortification: Given the size of its surpluses, Kazakhstan is unlikely to close the door to wheat exports, thus insuring the growing milling industries in Tajikistan and Kyrgyzstan of ample wheat supplies. This means that fortification in these countries will primarily be a question of working with domestic millers and secondarily of controlling imported wheat flour. Wheat flour production Key findings

Total production of 4 million tons wheat flour, more than half of domestic consumption.

Major over capacity and a rapidly consolidating industry.

Only 40 milling companies likely to survive in the next 5 to 10 years. Kazakhstan wheat milling industry is large, competitive and dynamic. The industry has been entirely in private hands for over 20 years since the economic reforms that followed the country’s independence. The milling industry has been consolidating at a rapid rate in the last 10 years to the point where there are just 200 to 250 mills still in business compared to over 1000 officially registered mills 15 years ago. Out of 250 mills still officially in business only about 100 are operating, but even many of these run only a few months per year. There is no official data on production and exports of individual milling companies. However some industry sources estimate that just 8 companies account for 50% of production of domestically consumed wheat flour. The industry grinds about 5 million tons of wheat per year to produce about 4 million tons of wheat flour according to the millers association (League of Grain Processors and



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Bakers). However the installed capacity of mills still in operation may be enough to grind 12 million tons of wheat to make 9 million tons of wheat flour, meaning average capacity utilization of less than 50%. In coming years smaller, less efficient, poorly capitalized mills will continue to close to remove excess capacity from the sector.The Ministry of Agriculture has proposed to remove the subsidies on interest paid by milling companies having determined that 30 to 40 milling companies would be enough. Significance for flour fortification: Fewer larger and more profitable mills will increase the feasibility of introducing and enforcingflour fortification for both domestic and export production. Milling clusters Most of Kazakhstan’s milling, particularly for export, is concentrated in three geographic clusters. In order of importance they surround the cities ofKostanai, Shymkent, and Karaganda. Otherwise mills and pasta production are distributed around the country mainly to serve population centers like Almaty, Astana, Petropavlovk, Semi-Palatinsk and others. Table 1: Milling clusters

Mill clusters and other areas

Number of mills

Total flour production

Share of total flour output

Export share

Export volume flour

Kostanai cluster

110 but 31 > 50 tons per day

1.1 million tons

27% 70% 800,000

Shymkent cluster

25 > 50 tpd 800,000 tons 20% 80% 640,000

Karaganda 10 500,000 tons 13% 70% 350,000

Non clusters

Almaty region 4 300,000 tons ?

30% ? 90,000

Astana 3 200,000 tons 40% ? 80,000

Other cities and regions

50 to 100 1.3 million tons??

20% ? 200,000

Total wheat flour volume

4 million tons 2.2 million



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tons

Source: Author estimates based on interviews with milling companies.

Kostanai

Kostanai oblast is a major wheat growing zone, with about 4.2 million ha planted, in the north central part of Kazakhstan. Here is found thecountry’s largestconcentration of milling enterprises. There are said to be about 110 milling plants. Around 30 have capacity of 100 tons or more per day. These mills produce 27% of Kazakhstan’s wheat

flour. Up to 70% of this production is for export markets. Nearly all shipments are by rail.

There may be only 50 mills that operate consistently. It is likely that most of the mills smaller than 50 tons per day will close as demand for wheat flour exported from Kazakhstan declines. These mills are too small and distant from the main export markets to effectively compete with mills around Shymkent.

Shymkent

Shymkent lies in south central Kazakhstan just 100 km from the border with Uzbekistan and 120 km from the single largest market for Kazakhstan wheat flour, Tashkent, the

capital of Uzbekistan. Rail lines for shipment of wheat and wheat flour to Uzbekistan, Tajikistan, southern Kyrgyzstan and Afghanistan pass through Shymkent. The zone around Shymkent has some production of irrigated winter wheat 5% of the total Kazakhstan wheat crop.

About 25 mills centered aroundShymkenthave capacity in excess of 50 tons of wheat per day. About 10 of these can process more than 200 tons per day. These mills are said to account for 20% of all wheat flour production in Kazakhstan but may constitute around one third of all wheat flour exports.

They mostly grind wheat moved by bulk rail from the north of the country to large

storage facilities at the mills. Some lower cost local wheat is blended in to get an optimal mix of wheat quality versus cost. The larger Shymkent milling companies have their own silo storage facilities in the major wheat processing zones in the north, some 2000 km distant, enabling them to buy large quantities immediately after the harvest when prices are lower.



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About 80% of total wheat flour production in Shymkent is exported. There is no official data but about 70% of the exports are likely to go to Uzbekistan, and the remaining 30% to Afghanistan and Tajikistan. Most exports are by rail at lower freight costs and always paying import duties, but a certain share is unofficial cross border trade in trucks without paying duties.

Though they are located far from their wheat sources, the Shymkent mills have the advantage of being very close to their largest market, Tashkent. Tandoor bakers in Tashkent rely very heavily on higher quality Kazakhstan wheat flour to satisfy demand for nan from consumers in Tashkent where incomes are much higher than elsewhere.

Shymkent mills are facing more and more competition from the 40 or so private mills that have sprung up around Tashkent. These mills use imported Kazakhstan wheat rather than lower cost lower quality Uzbek wheat.

The largest milling companies in Shymket are Altyn Dan, Sana Corporation (3 plants in south) Dani-Nan.

Significance for flour fortification: The mills in Shymkent are relatively more important for increasing consumption of fortified flour in Uzkbekistan. They are also important Tajikistan and Afghanistan, but less so for Kyrgyzstan since it is supplied mainly by mills in other parts of Kazakhstan.

Karaganda

Karaganda is an industrial city about 200 km south of Astana that is situated in a small wheat growing zone with 650,000 ha producing about 600,000 tons annually. All the wheat grown in the zone is processed by the 11 eleven mills around the city that are still in business. However only the three largest ones operate steadily and account for at least half of total flour output.The other eight may be idled 4 to 5 months of the year. Some of thesesmaller mills are expected to cease operations within a few years.

Ten years ago there were 22 mills around Karaganda. In Soviet times there were just one or two large government milling complexes.

Karaganda mills report exporting about 80% of their wheat flour output. Major markets are Afghanistan, Uzbekistan and Tajikistan. These mills may sell a higher share of their flour to Afghanistan and Tajikistan compared to mills in Shymkent.



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The three largest milling companies in Karaganda are: Dorad (500 tons per day capacity / 100,000 to 120,000 tons per year of wheat), Aknar, and Suknar. The latter has a large industrial bakery supplied by its mill so its dependence on export of wheat flour is less.

Significance for flour fortification: Though a smaller cluster that Shymkent and Kostanai, the three largest of the Karaganda mills send up to 90% of their flour for export and are relatively important for Tajikistan and Kyrgyzstan.

Other cities

There are two to three milling complexes each in such large cities as Almaty, Astana, Semipalatinsk and Petropavlovsk. Wheat flour exports Key findings

Uzbekistan, Afghanistan, Tajikistan and Kyrgyzstan are the most important export markets for Kazakhstan wheat flour

Central Asian countries to the south have seen very large increases in their consumption of wheat flour from Kazakhstan in the last 12 years.

The increases have now leveled off and wheat flour exports to some countries

like Uzbekistan and Tajikistan are starting to decline due to an increase in new domestic milling capacity.

Due to superior milling technology and abundant wheat supply Kazakhstan wheat exports are likely to maintain a significant share of the Tajikistan and Kyrgyzstan markets, despite the increased local capacity and barriers to imports.



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Figure: Kazakhstan Flour Exports by Country (‘000s tons)

Source: Kazakhstan League of Gain Processors, YevgeniyGan

Kazakhstan wheat flour exports expanded from just 172,000 tons in 2001 to a peak of 2.7 million tons in 2012 following a bumper wheat harvest in 2011. Over the last five years wheat flour exports have averaged about 2.2 million tons.

However they fell sharply to 1.7 million tons in 2013. They are expected to rebound in 2013 to 2.25 million (IGC May 2013). Some of the changes reflect the size of the wheat crop in Kazakhstan and also variable demand from Afghanistan which can easily shiftto supply from Pakistan when Kazakhstan prices go up due to a small crop.

However the trend is now for a plateauing or even a gradual decrease in Kazakhstan wheat flour exports probably to a level of 2 million tons per year.

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698,4

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377,4

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463,0

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364,3

872,1

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Кыргызстан Таджикистан Узбекистан Афганистан

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2005 2006 2007 2008 2009 2010



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Cash rich Afghan flour importers are keeping alive a certain number of financially struggling Kazakhstan mills. In return for low prices the traders pay in advance for their orders, enabling the mills to buy wheat and pay operating costs.

Figure: Exports of Flour from Kazakhstan

Source: Kazakhstan League of Grain Processors, YevgeniyGan

Significance for flour fortification: Ensuring that Kazakhstan millers fortify their wheat flour for export would increase the potential coverage of fortified flour in Uzbekistan,

Afghanistan and Tajikistan by 20% to 50%. In Afghanistan imported flour is about 90% of the industrial milled flour, since local wheat is milled 80% in small village mills.

Capacity of Milling Industry to Fortify Key Findings

Nearly all commercial mills in Kazakhstan are already equipped with feeders.

Some mills may need additional feeders in order to fortify.

Many mills have experience with fortification through export orders from WFP.

The Kazakhstan mills have good access to sources of vitamin and mineral premix.

There may be some need of acquisition of extra feeders by mills for fortification.

170,9

1454,3

1800,3

2232,9 2292,8

1122,4

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532,3483,5

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2001 2002 2003 2004 2005 2006 2007 2008 2009 2010дата

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Nearly all wheat milling plants in Kazakhstan are equipped with micro-feeders that are used for the addition of flour improvers, mainly enzymes. During the ADB project that ran from 2002 to 2007 from 15 to 20 milling companies received feeders and their personnel were trained in dosing the premix and quality control procedures. For many of the mills this was their first experience in the use of micro-feeders, but now nearly all mills use add flour improvers to remain competitive. Some mills that want to start fortifying for the first time, or that want to restart, may need to acquire new feeders. This is because the addition of vitamin and mineral premix should be done in separate feeders than those used for flour improvers. However these mills have experience buying feeders, and the cost is minor. One miller reported the cost of Turkish made feeders at $1000 to $3000. The overall technical ability of the Kazakhstan milling industry to fortify its production is increasing as the consolidation takes place. This is because the surviving mills are larger and better managed, and also more profitable such that fortification will be less of a burden. About 20 of the largest mills are members of a millers association called the Kazakhstan League of Grain Processors and Bakers (?), based in Astana. Under its long-time President, EvgeniyGan, this association has played a role in flour fortification since the ADB projects in 2002 to 2007 and is capable of disseminating technical information about flour fortification to its members and to other mills. Significance for Flour fortification: There is little investment needed in equipment or training for flour fortification to go forward in Kazakhstan. The organizational structure and premix supply is also in place. Actual Wheat Flour Fortification Key findings

Only 7 to 10 milling companies are actively fortifying in compliance with the law.

A maximum of 20% of domestically consumed flour is fortified.

Companies do fortify without any problem when they receive orders specifying

this from their domestic customers or dealers in other countries.

Kazakhstan mill routinely win tenders to supply fortified wheat flour to WFP in Afghanistan and Tajikistan.

Government purchases for institutional users specify fortified flour.



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Despite passage of a mandatory flour fortification law in 2009 by Kazakhstan’s parliament, enforcement and compliance have been poor. The number of milling companies actively fortifying their flour for domestic consumption is between five and 10 according to industry sources. Only 10% to 20% of all domestically consumed wheat flour is fortified according to most industry sources.

In 2011 the Kazakh Academy of Nutrition completed a household survey that showed that 23% of all households in the country had fortified flour.

Those mills fortifying are mostly from the group of 15 mills that participated in the ADB project, receiving feeders and premix around 2004. These mills have continued doing it in good faith because the cost is not high and it has become a standard milling practice.

ZernovayaIndustriya, based in Kostanai and the largest milling group in the country, is the number one success story of flour fortification in Kazakhstan. It has continued to procure premix and fortify most of its first grade flour at three of its mills. The company is the dominant flour (Corona brand) supplier in Western Kazakhstan oblast near the Urals. A baseline survey was done in 2008, and end-line survey done in 2011 showed a big increase in the purchase of fortified flour by households (from 3% to 68%) and a corresponding drop in the very high levels of anemia (from 77% to 42%) in that area, one of the poorest of Kazakhstan.

The chairman of the company was recognized by the government and UNICEF with an award in 2011 for his company’s commitment to fortifying its flour.

The government of Kazakhstan has been promoting the concept of Almaty as a hub for storage of emergency food supplies. Production of wheat flour for this emergency reserve could stimulate production of FF in the country.

Significance for flour fortification: There is still a small but solid basis of fortification by large companies in Kazakhstan showing that it is feasible for nearly all millers above a certain size to do so.

D. Regulatory Assessment Summary



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Over a period from 2002 to 2009 Kazakhstan developed and adopted a flour fortification standard that was used by six countries in the region and passed a mandatory law in parliament. But the political will was lacking to actually put in place a strict enough monitoring and enforcement framework to force compliance. If the government supplied them with premix, its members would fortify, according to the millers association.

Flour Fortification Standard Key findings

Kazakhstan’s flour fortification standard is essentially the same as a number of others in the region.

There is some agreement already on the part of Kazakh Academy of Nutrition of the need to change the national fortification standard to include EDTA iron.

At the start of the ADB project, Kazakhstan adopted as a flour fortification standard the original KAP Komplex formula that was worked out by the Kazakh Academy of Nutrition for all six countries in the project. The standard includes electrolytic iron, folic acid, zinc and three B vitamins: thiamin, riboflavin and niacin as in Table xx below. The standard called for the addition of 120 grams of premix per ton of first grade wheat flour and the addition of 150 grams per ton to superior grade flour. It did not call for the fortification of second grade flour due to its higher bran, and therefore micronutrient content, and because the higher level of phytates in this flour would interfere with iron absorption. Kyrgyzstan has revised its standard from the original KAP Komplex to replace electrolytic iron with EDTA iron based on the international consensus about the desirability of the latter due to its much higher bio-availability. So far none of the other five countries have switched their iron specification. However, the Kazakh Academy of Nutrition informally recognizes the need to change Kazakhstan’s own standard when the next push to advance fortification takes place. The KAP Komplex standard is accepted by WFP when it tenders for wheat flour supply to Afghanistan and Tajikistan.



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Significance for fortification: Even the mills that are actively fortifying in Kazakhstan would have to place special orders for higher cost premix in order to comply with the wheat flour fortification standard in Kyrgyzstan because it contains EDTA iron.

Fortification Legislation

Key findings

Kazakhstan has mandatory fortification law that is not enforced.

Milling industry opposition to complying with the law mainly hinges on a demand that the government should supply premix to them at no cost.

There have been some initiatives in the second half of 2013 to allocate national budget funds for centralized premix purchases.

Fortification legislation impacts only wheat flour for the domestic market and not for export.

In 2009 Kazakhstan’s parliament passed a mandatory flour fortification law covering all first grade and superior grade flour for domestic consumption but not for export. This was the culmination of an effort spanning many years beginning with the ADB project from 2002 to 2007 which did not result in the enactment of a law as hoped.

The law’s adoption culminated a period of social marketing campaign executed by UNICEF and supported by a GAIN grant.The legislation adopted was based on norms provided by GAIN

The normal practice in flour fortification in most countries where it is done successfully is for the mills to procure their own premix and pass the small cost increase on to customers. The Kazakhstan law followed this principle and did not contain a provision for the government to supply premix to millers.

Unfortunately since its passage only five to 10 companies have proven willing to pay for premix on their own in order to comply with the law.

Significance for flour fortification: The existence of a mandatory fortification law with a low level of compliance in Kazakhstan could add to the difficulty of winning support for passage of mandatory legislation in Kyrgyzstan and Tajikistan.



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Quality Control and Monitoring

Key findings Regulations for implementation of the mandatory law have not been put in place. Recently there has been some high level attention in government to the lack of implementation. Government flour purchases do require fortification. The program of subsidized “social flour” was a missed opportunity to increase fortification. After passage of the law by parliament, the executive branch of government failed to take action to develop a set of regulations for implementation of the law. Without any outside funding after the GAIN grant ran out, most stakeholders reduced their efforts in support of fortification to a minimum. There was no political will on the part of the government authorities to require the Ministry of Health or another agency to enforce the law. Apparently no budget funds were allocated for implementation of the law, let alone for premix procurement.

In August 2013 UNICEF had a high level meeting with the Deputy Prime Minister to discuss the poor implementation of the fortification law. He asked the MOH to come up with a plan of action for implementation of the law. It is not clear whether this plan of action has been submitted or taken up.

On the positive side, millers report that since passage of the law government tenders have specified fortified flour for institutional users like schools, hospitals, prisons and the military.

Beginning in 2008 with the global escalation in grain prices, the Kazakhstan government had a program for subsidizing the price of domestic flour, called “social flour”

(sotsialnayamuka”). This involved subsidized sales of wheat to mills that were then required to sell the output at below market prices to certain commercial bakers who could then keep bread prices at lower levels. Even though it would have been possible for the government agencies involved to require the mills to fortify this flour, normally intended for poor people, this was not done. Since the program guaranteed markets and good profitability for the mills, they would have complied. The social flour program ended in August 2013.



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As in other countries of the former Soviet Union, enforcement and quality monitoring of fortified flour should be the responsibility of the Sanitary and Epidemiological Service (“SanepidSluzhba” or SES) under the Ministry of Health. This agency normally has responsibility for annual inspections of food processing plants to check mainly for cleanliness. However SES has engaged successfully in enforcement of salt iodization in Kazakhstan, an activity analogous to monitoring of fortified flour.

The fortification law did require MOH to produce a quarterly report on the level of fortification in the country, and this has become the responsibility of SES. No such report was made available to the consultant.

SES inspectors on their annual visits to some mills are reported to ask for evidence of flour fortification. However they are reported to have been satisfied with invoices and other documents evidencing purchase of just one carton of premix.

In general SES inspectors have the reputation of accepting or even demanding payments in order to not write up violations, which is one reason government policy limits them to one plant inspection per year.

Under the ADB project the SES main laboratory did receive a spectrophotometer and some training for analysis of iron in flour (?).

The Kazakh Academy of Nutrition (KAN) has a well-equipped laboratory for analysis of many micronutrients in foods and has provided this service at various stages of flour fortification. It also conducts household surveys. In 2011 its survey showed that 23% of all households in the country had fortified flour. KAN does nutrition surveys of households in three oblasts (provinces) per year. There are 14 oblasts in the country.

Significance for flour fortification: Enforcement of the wheat flour law for domestic flour should make it easier to get Kazakhstan millers to comply with mandatory fortification

laws that may eventually be adopted in Kyrgyzstan and Tajikistan. If importers demand fortified flour, the Kazakhstan millers would comply without any need for inspections.

Premix Supply Key findings

There are commercial supply channels for premix in Kazakhstan



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There are also initiatives for the millers association to undertake the distribution of premix purchased by the government.

There have been some proposals put forth to the government by the millers association for the centralized procurement of premix using budget funds. The plan of action for implementation of the fortification law may also include provisions for such a procurement scheme. There are already well-developed commercial channels in place for supply of vitamin and mineral premix to milling companies. A number companies that are the major suppliers of flour improvers also supply vitamin and mineral premixes to their customers in Kazakhstan, normally through local dealers. The major suppliers currently are Muehlenchemie, Germany through its dealterSynar Group in Almaty, andPolen, Turkey through a dealer. Muehlenchemie is one of four premix suppliers accredited by WFP, and has been certified by GAIN’s premix program. One large miller reported the cost of vitamin and mineral premix from Turkey at $10 per kg, or $1.50 to $3.00 per ton of wheat flour. There was an attempt to introduce premix production to Kazakhstan at an existing facility with the necessary blending equipment, but fortification never reached the necessary volumes to make local production of premix viable. Kazakhstan joined a customs union with Russia in 2013 (?). This has resulted in an increase in the import duty for premix from European Union or Turkey from 5% to 15%. Premix supply from Russia would not have an import duty, but there are no reputable Russian producers of vitamin and mineral premixes for wheat flour.

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