TRADE RECOVERING IN KAZAKHSTANApprehensive of the second crisis wave in Kazakhstan due to potential drop in demand in the FMCG sector, I decided to review the statistics on commercial activities in Kazakhstan. The statistics on retail turnover from 2008 through the summer of 2010 shows that the crisis, indeed, reduced the trade volume. The year 2009 was the most difficult one for commercial chains. However, since 2010, turnover volumes have been on the rise. In June 2010, trade volume in Kazakhstan exceeded the June 2009 level by 17%. The positive trend has been observed during all 6 months of 2010.
It should also be noted that positive dynamics are observed mostly because of sales growth in the food segment, whereas a slight drop of trade volumes is observed in the non-food segment (around 3-5%). Still, food products make up about 36% in the total structure of retail turnover in Kazakhstan.
Leaders in trade volumes in the food segment include:
- Meat, including poultry meat and meat products (sales volume in 2009 = about 131 billion tenge)
- Various drinks, including alcoholic drinks(162 billion tenge)
- Dairy products and eggs (97 billion tenge)
- Bread and confectionary made from flour (74 billion tenge)
Leaders in trade volumes in the non-food segment include:
- Clothes and textile goods (about 186 billion tenge)
- Building materials (76 billion tenge)
- Computers and software (74 billion tenge)
- electrical household appliances (about 70 billion tenge)
On the whole, the Kazakhstanis’ purchase behaviour recovers from the crisis shock. People see that economy is not going down but rather shows signs of stability. In such conditions, purchase behaviour becomes softer. If positive trends in Kazakhstan’s economy remain, trade volumes in the non-food sector will, too, recover by 2010 or early 2011.
A REVIEW OF THE FOOD AND BEVERAGE MARKET IN KAZAKHSTANThe food industry is a critical sector in any economy because production of food has a direct impact on the country’s economic and food security.
In this document, we will review the food and beverage market in Kazakhstan, and try to see what future this sector has, what trends exist in the market today, and what sectors are leading in Kazakhstan.
According to the Kazakhstan Agency for Statistics, in 2009, food and beverage production’s share in the processing industry was about 24% (8.9% of all industrial production). As compared with 2008, the share of food production in the processing industry in 2009 has grown by 4%.
On the whole, in monetary terms, the market slightly decreased in 2009 in comparison with the previous year, and totalled around 940 billion tenge, first of all due to import reduction. But by and large, the market is going through the economic recession quite well.
In 2009, domestic production in kind (volume index) grew although somewhat a little. The growth was about 2%. The domestic production trend in such an important market, with import volumes shrinking down, is a pleasing one.
In monetary terms, the following market segments in Kazakhstan are leaders in production volumes:
- flour milling
- beverage production
- bread baking
- dairy sector
In the number of companies which make food and beverages, the flour milling and bread making sectors lead again, as well as alcohol-free drink production and milk processing.
It is also important to understand trade activity in the market. According to statistical data, the food trade recession in 2008 (about 2%) was followed in 2009 by a 2.8% increase in food and beverage trade in Kazakhstan.
This also demonstrates that the population is gradually switching from “economic austerity” characteristic of the first crisis years, and recovers its liberal purchase behaviour.