Chief of the State Grain Fund: ‘The cheapest bread in the CIS is sold in Azerbaijan’ - INTERVIEW

Chief of the State Grain Fund: ‘The cheapest bread in the CIS is sold in Azerbaijan’ - <span style="color: red;">INTERVIEW
# 07 February 2013 10:37 (UTC +04:00)

Baku. Kamala Guliyeva – APA-Economics. Chief of the State Grain Fund under the Agency for Material Reserves of the Ministry of Emergency Situations of Azerbaijan Zulfugar Mammadov gave interview to APA-Economics

- How much are the current grain reserves of Azerbaijan?

- Reliable supply of population with food products is always in the focus of attention of the President in Azerbaijan. Grain reserves are enough in accordance with demand of country population and from this viewpoint there is no problem. Under the #206 decision of the Cabinet made on September 18 2012, supply of high quality wheat has been determined in amount of 500,000 tonnes. Supply of foody wheat is carried out in accordance with the graphic and that is why there is no risk for grain shortage in the country. Besides, in order to fulfill the Cabinet’s task on supply of wheat flour, over 12,000 tonnes high quality flour has been supplied and kept in the reserve.

- What is the total demand for grain in the country?

- There are various calculation rules. This number changes depending on the population growth. On average, the country’s demand for foody wheat stands at 1.5 mln tonnes. Wheat is used in both poultry and cattle-breeding. Calculations and international practice show that if yield of cereals, leguminous plants makes 1 tonnes, it’s considered high quality food security. In the past decades up to this day, no problem occurred in Azerbaijan related to bread. And it will not occur in future, as well.

- How much grain did Azerbaijan purchase last year?

- The country has private large flour mills. We can’t say how much grain these mills bring to the country. But we could not stock up grain from local farmers last year. Despite the fact that we announced about grain reaping at all mass media, the State Grain Fund did not receive foody wheat from farmers. In 2009 and 2011, we could store up wheat meeting the demands.

- Have you investigate the reason of it?

- One of the goals in creation of the State Grain Fund is the establishment of market for local farmers engaged in wheat production. Thus, the farmers can participate in stoking process by handing over own product to the state and earn money, as well as extend production spheres. Maybe, drought recorded in the years without proposal impacted on the process. On the other hand, skills to work with the market have not formed among the population, yet.

- How much is grain purchased from local farmers and foreign countries?

- Last time we offered AZN 300 per tonne to local farmers. We started with AZN 220, thereafter raised the price up to AZN 250 and AZN 300. price of grain in foreign countries is different. In the current year, stoking of foody grain to the Fund is realized by $260-320 per tonne with the condition of accepting the product with elevator.

- From which countries does Azerbaijan mainly purchase grain?

- From Kazakhstan and Russia. Other countries can also be included into this list. But we try to avoid the factors that may cause price hike of bread. We conduct joint analyses with the Ministry of Economic Development. The cheapest bread in the CIS is sold in Azerbaijan. Though we buy grain from Russia and Kazakhstan, 700 gram-bread sold in Azerbaijan is almost 2 times cheaper from the breads sold in these countries.

- According to local entrepreneurs, cost of grain bought from Kazakhstan hiked up 60% in the last half-year. How does this correspond to the truth?

- 60%, or maybe hiked up more. Last year, if people could purchase foody wheat for $235, this year it costs $320 or even more. And main reason of it is connected with reduction of wheat production on world market. As a result of negative impacts of global climate changes, droughts and unfavorable factors of environment, the price of wheat rise on world market.

- Russia’s own grain import from Kazakhstan is also shown as one of the reasons for price rise.

- Yes, such information exists. Russia’s regions close to Kazakhstan import grain from this country. There was a real drought in Russian territory. This is the demand of market: if yield is less, then of course, the price must jump.

- Will the rising of grain purchased from Kazakhstan influence the flour price in Azerbaijan?

- No. the price of flour rose. If you remember, in summer months, the price of bread in Azerbaijan was AZN 0.30-0.35, flour bag – AZN 14-15 prior to price rise of flour in world market. Now, the flour bag rose to 18-19. Bread is sold for AZN 0.40. We don’t expect price rise any more. Besides, the government has grain and flour reserves to keep the grain and flour prices stable. In these cases, the government prevents the rising and shortage through selling grain from reserves.

- How much grain reserve Azerbaijan has now?

- We have wheat to meet Azerbaijan’s need if we don’t import. Taking the activity of businessmen in this sphere into consideration, we can surely note that Azerbaijan does not expect any problem related with grain and flour.

- Azerbaijan is also a country that is in the state of war. How are we ready for state of war?

- The talk can also be about force majeure cases. Flood, earthquake and other natural calamities can cause shortage of bread and flour. For this purpose, Azerbaijan constructed elevators with modern technological equipments. We can provide to save the grain without loss. The government has opportunities to save 260,000 tonnes of wheat. But, in line with private flour farms, Azerbaijan has elevators to save 1 mln tonnes of wheat. Ministry of Economic Development has constructed elevators with the support of National Entrepreneurship Support Fund. They were connected to automatic management system. At the same time, all mills from Soviet Union have elevators.

- Can Azerbaijan export grain to the third countries?

- Theoretically, everything is possible. But first of all we try to provide food security in accordance with the President’s task. Other issues could be realized by businessmen.

- What are the plans of State Grain Fund for this year?

- Our main goal is to stock grains from local farmers. This year, wheat was sown in 2 large pilot farms. We targeted to stock these. We are ready to receive the grains of farmers in anytime. Stocking of grain is based on the requirements for stocked grain to State Grain Fund in the “Rules on keeping and usage of State Grain Fund” confirmed in accordance with the decision#105 of the Cabinet of Ministers dated to July 7, 2009.

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