Sunflower is becoming a real commodity currency for Kazakhstani farmers, and oil mills in Kazakhstan are preparing to significantly increase capacity and supply not only traditional markets (Central Asia) but also China, Iran, Afghanistan with oil and fat products... By the way, Kazakhstan has already become the sole supplier of sunflower meal to Iran, and has significantly strengthened its position in the Chinese market. All this and many other things were discussed by key market participants, experts and representatives of relevant agencies during the international conference KazOil, which took place in Astana on February 13, 2025.
The event was dedicated to the development of the oil and fat industry and the oilseed market in the world and Kazakhstan. The event was organized by APK-Inform Asia and Event Group. The event was supported by partners - ZHEJIANG GRAIN GROUP, National Oilseed Processors Association (NOPA), general sponsor Myande Group, sponsors QAZAQ-ASTYQ GROUP and Dingsheng, legal partner of Fortior Law.
The conference was attended by more than 150 delegates from Asia, Europe, and the Black Sea region: oilseed processors and producers of oil and fat products, oilseed farms, seed farms, traders, equipment suppliers, engineering companies, logistics, brokerage, surveying, and law firms.
The KazOil-2025 agenda included presentations by top speakers from the Asian and global oilseed markets, as well as a discussion session to develop solutions for the effective development of the oil and fat industry.
We started with the trends in the global oilseed market, on which the development of the Kazakh market depends. Aaron Hanson, Senior Economist, Agricultural Division, GlobalData (formerly LMC International) , spoke about the trends in the global vegetable oils market. The speaker gave his assessment of the balance of supply and demand of oilseeds in 2024/25 MY, showed the directions of the key countries-players in terms of export and import.
In particular, he noted that this season the palm oil market is expected to grow after last year's decline to the lowest levels. At the same time, the medium-term forecast foresees a slowdown in the growth of supplies of this product. However, this will be offset by the strengthening of other oils (soybean and sunflower). Thus, one of the largest importers of vegetable oils - India - is reducing imports of palm oil, while increasing purchases of cheaper soybean oil, and the share of sunflower oil is growing.
China is currently the key market for Kazakhstan's oil and fat products (not yet in terms of volume, but in terms of price). Therefore, the guests of the conference listened with great interest to the report of Fang Gang, Director of the Chinese company ZHEJIANG GRAIN GROUP Co. (one of the largest state-owned enterprises in Zhejiang Province), dedicated to the vegetable oil market in China in general and the prospects for cooperation with Kazakh exporters in particular.
The speaker said that the share of Kazakh sunflower oil in China's total imports of this product is gradually increasing. The three largest suppliers of sunflower oil to China are Russia, Ukraine and Kazakhstan. And while Ukraine's share is steadily declining due to the military conflict with Russia and logistical problems, Russia and Kazakhstan, on the contrary, are increasing their supplies of this product to China.
“In 2022, China purchased 53% of sunflower oil from Ukraine (about 319 thsd tonnes), 36% - from Russia (216 thsd tonnes), and only 6% - from Kazakhstan (about 39 thsd tonnes), while in 2023 these figures changed. Ukraine's share decreased to 38% (with a higher volume of supplies - 581 thsd tonnes), Russia's increased to 52% (783 thsd tonnes), and Kazakhstan's increased to 9% (the volume increased more significantly - to 129 thsd tonnes). And in 2024, the ratio in imports was as follows: Russia supplied 65% of sunflower oil to China (698 thsd tonnes), Ukraine - only 23% (245 thsd tonnes), and Kazakhstan - 11% (115 thsd tonnes),” the expert said.
At the same time, the total imports of sunflower oil by China in 2024 amounted to 1.08 mln tonnes (against 1.5 mln tonnes in 2023 and 605 thsd tonnes in 2022).
Regarding the future prospects of oil and fat products from Kazakhstan in the Chinese market, Mr. Gang noted two important points. Mr. Gang noted two important points.
Firstly, for more active and profitable trade, it is important for Kazakh suppliers to move cargo to Alashankou warehouses in advance. This will guarantee the safety of the cargo, provide flexibility in pricing (based on futures contracts) and help solve logistics problems.
Another opportunity is to expand the use of flexitanks, which will not only speed up delivery times but also expand the sales area from the Xinjiang Autonomous Region to the coastal regions of China.
Iran is also an important and promising market for Kazakhstani oil and fat products.
Interestingly, today Kazakhstan remains almost the only exporter of sunflower meal to Iran. This was reported in the report by the analyst-expert of the agricultural market Marina Sidak.
She noted that, according to the preliminary estimates, in 2024 Iran imported 34 thsd tonnes of sunflower meal from Kazakhstan (in 2023 - 25 thsd tonnes, in 2022 - 6 thsd tonnes). At the same time, there were no supplies from other countries last year, while in 2023 the UAE and Turkey supplied small volumes.
China remains the key exporter of sunflower seeds to Iran (in 2024 - 76 thsd tonnes, which is more than twice higher than in 2023).
The top three suppliers of sunflower oil to the Iranian market are Turkey, UAE and Russia. According to the preliminary estimates, these countries exported 411 thsd tonnes, 260 thsd tonnes and 72 thsd tonnes of oil to Iran respectively. At the same time, supplies of products from European countries (Germany and the United Kingdom) have significantly decreased.
An interesting topic was the development of the oilseed market in neighboring Russia - it is no secret that the Kazakh market is quite closely related to it.
According to the forecast of Vladimir Zhilin, the Head of the Commodity Markets Analysis Department of Rusagro Group , Russia will produce a high volume of sunflower oil in 2024/25 MY - 7.82 mln tonnes (last season this figure was estimated at 7.69 mln tonnes). Quite large stocks of oil in the country at the end of the season (at 704 thsd tonnes) will keep domestic prices from rising significantly. On the other hand, the start of the season will still be quite high, so it is profitable to sow sunflower.
According to the expert, the exports of Russian sunflower oil in 2024/25 MY will reach 5.5 mln tonnes (against 5.25 mln tonnes last season and 4.27 mln tonnes the season before).
According to Mr. Zhilin, despite the slight decrease of the gross harvest of sunflower seeds in 2024 (at 16.6 mln tonnes, down from 17.3 mln tonnes in 2023), the volume of the crushing in Russia will increase from last year's 18.1 mln tonnes to 18.4 mln tonnes.
“In the last three seasons, exports of finished products (oil and meal) from Russia have been severely hampered. Now the situation seems to be improving. We will process the seed harvest, but most likely we will not be able to export all the oil produced - the Russian infrastructure does not allow it yet,” the speaker explained.
And, of course, the cornerstone of the KazOil-2025 program was the Kazakh market of oilseeds and processed products, which was the subject of a separate session.
According to the forecasts of Farid Abitaev, General Director of the Oilseeds Research Farm, Chairman of the Republican Chamber of Seed Growers of Kazakhstan , this year Kazakhstan will increase the area under sunflower by at least 15%, to 1.5-1.8 mln ha. He noted that such interest in sunflower is primarily due to high demand and the development of exports of processed products (oil and meal) from Kazakhstan, in particular to China.
“We have a large shortage of raw materials for the existing processing capacities - 1.7 mln tonnes of sunflower is produced, and the capacity of the plants reaches 3.8 mln tonnes and will continue to increase,” the speaker said.
Another factor is the price. The global production of sunflower seeds is declining, and prices will rise.
Besides, sunflower is a drought-resistant crop, so it is possible to get good oilseed yields in unfavorable years. The only caveat is that the oilseed's yield potential has not been fully realized, but if farmers follow the technology, apply plant protection products in time, and fertilize in the required volumes, yields will increase significantly.
“In virgin regions, if the technology is followed, it is possible to get 15-20 c/ha, which will make Kazakhstan's sunflower absolutely competitive with its northern neighbors,” said Mr. Abitaev.
According to the expert, in the next 5 years, Kazakhstan can increase the gross harvest of sunflower to 4.5-5 mln tonnes.
The largest Kazakhstani processors who took part in the conference confirmed Mr. Abitaev's words about the high demand for oilseeds. According to them, two oil mills are already competing for each ton of sunflower seeds.
In the coming years, Kazakhstan plans to further increase its oilseed processing capacity. By 2027, this figure may increase to more than 6 million tons, including 5 mln tonnes of sunflower seeds. This was stated by Yadykar Ibragimov, the Chairman of the National Oilseed Processors Association (NOPA).
According to him, along with the increase in processing, Kazakhstan is actively increasing the volume and expanding the geography of exports of finished products.
One of the most promising and logistically convenient markets is China. In 2023/24 MY, the supply of vegetable oils and meal to China amounted to 274.5 thsd tonnes (27% of total exports). Currently, there are no problems with logistics in this direction, Y. Ibragimov noted, the monthly shipment plans are fulfilled by 95-96%. An important factor in the growth of supplies to China is the processing plants in the border regions with China, in which Chinese partners have invested.
Central Asian countries remain the traditional export destinations (they account for more than 50% of the export structure), and supplies to these markets may increase by 6-10% this season. However, Chinese buyers are ready to offer higher prices than importers from Central Asia, the speaker emphasized.
Iran and Afghanistan were also named among the promising directions.
According to the head of NOPA, Kazakhstani enterprises plan to supply vegetable oils to Iran. To this end, it is planned to equip a transshipment point for vegetable oils in the port of Aktau, from where exports to Iran are made.
As for Afghanistan, in 2023/24 MY, the share of supplies to this market was only about 2%, but it is planned to increase exports.
The conference agenda paid special attention to trends in fat production. The report of Natalia Solokhina, Deputy General Director for Technology and Director of the Oil and Fat Plant of Maslo-Del LLC, was highly appreciated by the participants.
“The only solution to preserve and strengthen the food security of the state is to produce solid vegetable fats by industrial hydrogenation and transesterification with a gradual reduction in the content of transisomers, developing the technology of using local oilseeds and auxiliary resources, and gradually reducing palm oil imports. It is necessary to develop the oil and fat industry through deep processing of oilseeds and 100% provision of the state with solid vegetable fats,” the speaker emphasized.
And Viktor Nesterov, Director of Build Pro Work LLC , spoke about new promising areas of sunflower processing and high-protein meal production. Thus, he demonstrated the advantages of the technology for obtaining a whole pure kernel and meal with a protein content of at least 44%. Innovative technologies (supercritical fluid extraction in a carbon dioxide environment) make it possible to obtain a pure product of high quality while reducing operating costs.
The final chord of the conference was a discussion session with representatives of the Ministry of Agriculture, holdings, processors, and foreign guests.
According to representatives of the oilseed processing plants, this season is very interesting for the industry.
“We are practically alone in the oil and fat market of Central Asia, given that Russia has switched to more premium markets - India, Africa, etc. Kazakhstan, in turn, has occupied this niche. Among the problems, I can point out the lack of oilseeds - not only sunflower, but also flax and rapeseed (all these products are exported as raw materials and are hardly processed). If you look at the experience of Ukraine, when there is a crop failure of the main oilseed (sunflower), you need to replace it with other oilseeds. Not everyone is ready to process alternative oilseeds. That is why we are working on a project to build a multi-plant that could quickly switch to different oilseeds,” said Alexander Buzhenitsa, Commercial Director of Qazaq Astyq Group LLP (one of the leaders in the oil and fat industry in Kazakhstan).
Other conference participants confirmed that growing niche oilseeds is interesting and promising. In particular, this refers to rapeseed, one of the most widespread oilseeds in the world, which in Kazakhstan is not yet daring to outgrow its “niche”.
Arman Kudaibergenov, director of Logos Grain LLC , said that growing rapeseed is not easy, as it is demanding on weather conditions. However, in good seasons, the profitability of this oilseed in Kazakhstan reaches 200%. Therefore, the share of rapeseed in the company's crop rotation structure is 10% annually. The most important market for Kazakhstani rapeseed and processed products is China.
According to the panelists, the promising areas in which Kazakhstan's oil and fat industry should develop are deep processing (refining, production and sale of bottled oil), as well as increasing the production of solid fats. Kazakhstan still lacks milk, and the pace of construction of dairy farms leaves much to be desired, so the consumption of vegetable fats as milk fat substitutes is growing.
“We can and should cover the import of these products with our own - about 60 thousand tons of vegetable fats are imported annually from the same Russia, so there is a potential for development. In a couple of years, we plan to set up production with the support of the relevant ministry,” said Mr. Buzhenitsa.
Another promising area in logistics is the development of the Caspian port infrastructure. This project will open up another premium market (after China) for Kazakhstani exporters of oil and fat products - the Iranian market, and then the UAE and Africa, where bottled vegetable oil could be sold.
In order for the industry to develop successfully and for exports of finished products to double (which is quite realistic), the panelists believe that three key issues need to be addressed:
- available financial resources;
- changes in the VAT payment and simplification of the VAT refund regime (all butter factories moan about the difficulty of receiving VAT amounts, these are huge “suspended” amounts)
- lack of qualified personnel. By the way, a separate long discussion on personnel issues ensued during the session. And this is a really pressing issue: where can we find specialists who can implement the ambitious plans of oil and fat companies to multiply production capacity and exports?
So, plans have been discussed, perspectives have been outlined, and so - full steam ahead! Thank you to all guests and partners of the KazOil-2025 international conference - it was, as always, useful, productive and inspiring!
Prepared by Tatyana Lyagusha
