19 BFC Kyrgyzstan Agriculture Finance Bulletin

09/2015

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19 K y r gy z s ta n Agriculture Finance Bulletin Iran and Kyrgyzstan to Strengthen Cooperation in Agriculture EEU Accession Increases Food Security, Shifts Trade from China, Says Expert Russia Allocates USD 71,457 to Irrigation Channel Renovation in Naryn USD 1.5 Million in Agreements Signed at AgroProdExpo 2015

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Agriculture Finance Bulletin Edition #19, September 2015

Contents State Initiatives ........................................................................................................... 2 1) 2) 3) 4) 5)

Bean Exports to Turkey Set to Increase ........................................................................................... 2 Iran and Kyrgyzstan to Strengthen Cooperation in Agriculture ...................................................... 2 Ministers Meet to Discuss Qatari Investment Opportunities in Kyrgyzstan ................................... 2 EEU Sets Third-Party Combine Harvesters Quotas .......................................................................... 2 EEU Accession Increases Food Security, Shifts Trade from China, Says Expert............................... 3

Foreign Aid ................................................................................................................. 3 6) 7)

Russia Allocates USD 71,457 to Irrigation Channel Renovation in Naryn ....................................... 3 Russian-Kyrgyz Development Fund Allocates KGS 1.2 Billion to SME Lending ............................... 3

Private Sector.............................................................................................................. 4 8) 9) 10) 11)

Grain Harvest Totals 1.6 Million Tons.............................................................................................. 4 Grain, Fodder and Potato Cultivation Increases.............................................................................. 4 USD 1.5 Million in Agreements Signed at AgroProdExpo 2015 ....................................................... 4 USD 500,000 Organic Apricot Processing Facility to Be Built in Batken .......................................... 4

Note: The Agriculture Finance Bulletin presents a monthly roundup of headlines and news stories related to investments and financing flows to Kyrgyzstan’s agricultural sector.

This bulletin is prepared by Business & Finance Consulting—a Swiss-based development finance consulting company with a long history of working in Kyrgyzstan. Currently, BFC is implementing the Agricultural Lending Programme for KfW. Read more »

BFC Max-Högger-Strasse 6 CH-8048 Zurich, Switzerland

Phone: +41 44 784 22 22 Fax: +41 44 784 23 23

info@bfconsulting.com www.bfconsulting.com

BFC. Agriculture Finance Bulletin.

State Initiatives 1)

Bean Exports to Turkey Set to Increase

September 19th, 2015, http://www.eng.24.kg/economics/177131-news24.html

Bean exports to Turkey are set to increase, according to the Ministry of Agriculture, adding that production totals 80,000 tons per year, with 60,000 tons exported.

According to a Turkish business delegation, bean demand in Turkey totals 200,000 tons per year, while it exports 190,000 tons and imports 40,000 tons. According to the country’s standards, beans should be 11-12 mm in size. Prices depend on the type of bean, with 1 kg of sugar beans costing USD 5.

The delegation is currently negotiating the introduction of new bean varieties in Kyrgyzstan, promising to assist with Turkey’s cultivation expertise.

2)

Iran and Kyrgyzstan to Strengthen Cooperation in Agriculture

September 6th, 2015, http://en.apa.az/news/231662

Iran and Kyrgyzstan can strengthen cooperation in agriculture, fisheries, construction, engineering, tourism, science and technology, said Speaker of the Iranian Parliament Ali Larijani in a meeting with Kyrgyz President Almazbek Atambayev.

The Speaker proposed bolstering trade and tourism with visa waivers, while President Atambayev suggested establishing railway connections and direct flights.

3)

Ministers Meet to Discuss Qatari Investment Opportunities in Kyrgyzstan

September 5th, 2015, http://www.qatar-tribune.com/viewnews.aspx?n=2122AF75-EB9D-4618-826730D9EBB830C8&d=20150905

The Qatari Foreign Minister for International Cooperation Affairs, HE Sheikh Mohammed bin Abdulrahman bin Jassim al Thani, met with Deputy Prime Minister Tayyrbek Sarpashev and Minister of Foreign Affairs Daniyar Sydykov in Bishkek to discuss investment opportunities in Kyrgyzstan – particularly in agriculture, mining and energy.

The Qatari delegation included representatives of the Ministry of Economy, the Qatar Investment Authority, the Qatar Development Fund and Qatar Mining. The Kyrgyz delegation included representatives of the Ministries of Agriculture and Economy, the National Bank, the Mining Commission, mining businesses, as well as municipal authorities.

4)

EEU Sets Third-Party Combine Harvesters Quotas

September 3rd, 2015, http://www.tazabek.kg/news:395286

The Eurasian Economic Commission has set quotas of 30 and 20 pieces , respectively, for the import of combine harvesters and harvester modules not originating from the Eurasian Economic Union (EEU), according to the Ministry of Agriculture.

Businesses wishing to purchase third-party harvesters and modules in 2015 and 2016 must submit their applications by October 1 and October 16, respectively, added the Ministry. Businesses engaged in the import and sale of third-party harvesters and modules must submit an application stating import volumes and dates, accompanied by a copy of the international trade contract.

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BFC. Agriculture Finance Bulletin.

5)

EEU Accession Increases Food Security, Shifts Trade from China, Says Expert

September 3rd, 2015, http://www.azernews.az/region/87472.html

Kyrgyzstan’s accession to the Economic Union (EEU) has increased food security, according to Central Asia Expert and Senior Correspondent at Radio Free Europe-Radio Liberty, Bruce Pannier.

The country is dependent on grain imports, particularly from Kazakhstan. With the EEU applying tariffs on exports to third-countries, Kyrgyzstan’s accession will render grain imports cheaper, while simultaneously sheltering it from sudden price fluctuations, said Pannier. Moreover, other imported goods, such as meat and dairy products, will also be cheaper, added the journalist. In addition, Kyrgyzstan can now export its goods to EEU members duty-free, rendering them more competitive.

However, the country’s accession also has costs: goods from Kyrgyzstan’s main supplier – China – are now subject to the EEU’s import duties. Consequently, trade will not only increase with the EEU, but shift away from China, concludes Pannier.

Foreign Aid 6)

Russia Allocates USD 71,457 to Irrigation Channel Renovation in Naryn

September 10th, 2015, http://www.vb.kg/doc/324671_rossiia_vydelila_71_tys._na_ylychshenie_irrigacii_v_narynskoy_oblasti.html

Russia has provided USD 71,457 for the restoration of the 12 km Altyn-Aryk irrigation canal, in Zhumgal, Naryn, according to Mirlan Diykanbaev, public relations expert for the United Nations Development Programme’s (UNDP) Naryn area-based development project.

The canal – which supplies 60% of Kuyruchuk – has not been renovated in 25 years, leading to water losses and the reduction of total irrigated land by half.

Thanks to the renovations, 400 hectares of agricultural land receive better irrigation, increasing yields and local incomes, said Kayirbek Usonaliev, head of the local Water Users Association.

7)

Russian-Kyrgyz Development Fund Allocates KGS 1.2 Billion to SME Lending

September 3rd, 2015, http://www.eng.24.kg/economics/176922-news24.html

The Russian-Kyrgyz Development Fund will channel KGS 1.2 billion in loans to small and medium enterprises (SMEs) via Aiyl Bank and RSK Bank, with interest rates not exceeding 12%, said the Fund’s Chair, Nursulu Akhmetova. The banks – chosen for their superior network coverage - will receive KGS 600 million each.

The Fund has a total capital of USD 250 million, with the next USD 50 million tranche expected to be delivered to Kyrgyzstan by September 30, added Akhmetova.

On top of loan financing, the Fund – in partnership with Russian companies – provides assistance with equipment purchases, such as mini agricultural processing plants for fruit and milk, according to Deputy Chair, Vladimir Nekrasov.

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BFC. Agriculture Finance Bulletin.

Private Sector 8)

Grain Harvest Totals 1.6 Million Tons

September 30th, 2015, http://www.finchannel.com/index.php/business/item/49678-kyrgyzstan-harvested-more-than-1-6-mlntonnes-of-grains

Grains and pulses were harvested across 567,600 hectares - 88.4% of cultivated area , said the Ministry of Agriculture.

The grain harvest totaled 1.61 million tons – up 386,700 tons year-on-year – while yields averaged 2.83 tons per hectare – up 0.66 t/ha year-on-year. The wheat harvest covered 293,600 hectares and totaled 759,600 tons, with an average yield of 2.59 t/ha – significantly higher than last year’s indices, according to APK-Inform.

Barley covered 172,700 hectares and totaled 395,300 tons – up from 200,000 tons in 2014 – with average yields of 2.29 t/ha. Corn covered 60,800 hectares and totaled 368,600 tons – with yields averaging 6.06 t/ha, up 0.21 t/h year-on-year. Pulses covered 35,500 hectares and totaled 64,700 tons. Oilseed covered 39,600 hectares and totaled 44,800 tons – with yields averaging 1.13 t/ha, according to the Ministry of Agriculture.

9)

Grain, Fodder and Potato Cultivation Increases

September 13th, 2015, http://www.agro.kg/ru/news/7553/

According to National Statistical Committee figures, this year’s top crops are grain (577,000 hectares), fodder (332,000 ha) and potatoes (84,000 ha).

All three crops saw year-on-year cultivation increases, while tobacco cultivation decreased by 71%, cotton by 40% and sugar beet by 33%.

10) USD 1.5 Million in Agreements Signed at AgroProdExpo 2015 September 11th, 2015, http://kabar.kg/eng/economics/full/13882

The 11th AgroProdExpo – a food and agricultural product fair compromising exhibits, presentations and meetings – opened in Bishkek.

According to organizers, the exhibit – the only of its kind in Kyrgyzstan – provides companies with a unique opportunity to demonstrate their products, while simultaneously presenting a business networking and negotiation platform. An estimated USD 1.5 million in contracts and cooperation agreements were signed at the fair, added AgroProdExpo representatives.

The exhibit includes food, spices, additives, alcoholic and non-alcoholic beverages, agricultural produce, packaging, equipment and production technologies.

11) USD 500,000 Organic Apricot Processing Facility to Be Built in Batken September 2nd, 2015, http://www.tazabek.kg/news:395212

A USD 500,000 organic apricot processing and packaging facility is to be established in Kara-Bak, Batken, according to the Ministry of Economy.

Amongst other products, the unnamed investors intend to produce organic jams, jellies and juices for export to Turkey. The Ministry proposed a partnership with the Alysh Dan cooperative, whose apricots were certified organic in 2014.

The project is expected to take 5 years to complete.

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Prepared by Business & Finance Consulting (BFC) www.bfconsulting.com In this bulletin, BFC provides extracts from articles that have been published by others and as a result cannot be held responsible for such content.

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