Potential of Kazakhstan’s grain export trade

Wang, Yameng; Huang, Peipei; Khan, Zaid Ashiq; Wei, Feng

doi:10.1590/0103-8478cr20210199

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AGRIBUSINESS • Cienc. Rural 52 (1) • 2022 • https://doi.org/10.1590/0103-8478cr20210199 copy

Potential of Kazakhstan’s grain export trade

O potencial do comércio de exportação de grãos do Cazaquistão

Authorship SCIMAGO INSTITUTIONS RANKINGS

ABSTRACT:

Kazakhstan is located in the hinterland of Central Asia. Its virtuous geographical advantages and huge grain production potential make it one of the most important grain exporters in the world. The research on the problem of the grain trade in Kazakhstan is of great significance for food security. This study measured its international competitiveness using the International Market Share Index, the Revealed Comparative Advantage Index, Trade competitiveness index and calculated the international competitiveness and analyzed the influencing factors of grain export by constructing an extended gravity model and measured its export potential. Results showed that Kazakhstan has a low share of the international grain market; however, wheat, barley, and buckwheat have strong export advantages; the level of economic development and economic distance has significantly promoted the scale of grain exports. While geographical distance, the difference in GDP per capita, and the fact whether trading partner countries have joined the Eurasian Economic Union have caused obstacles to grain exports. Kazakhstan’s export potential to 6 countries including Russia, Kyrgyzstan and China shows an upward” trend, its export potential to 6 countries including Tajikistan and Ukraine showing a “stable” trend, and its export to 9 countries included Poland and Germany. The potential showed a “declining” trend.

Key words:
grain; potential for trade; international competitiveness; Kazakhstan

Universidade Federal de Santa Maria Universidade Federal de Santa Maria, Centro de Ciências Rurais , 97105-900 Santa Maria RS Brazil , Tel.: +55 55 3220-8698 , Fax: +55 55 3220-8695 - Santa Maria - RS - Brazil
E-mail: cienciarural@mail.ufsm.br

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[1] Editors:

Rudi Weiblen

Daniel Arruda Coronel

Variable	Meaning	Expected	Theoretical Explanation
Y _it Y _jt	The real economy of Kazakhstan and country j	+	The level of economic development of both trading parties is positively related to bilateral trade flows
A _it A _jt	The total population of Kazakhstan and country j	+	The larger the population, the greater the demand for food, which will promote food trade
B _ift	The absolute value of per capita GDP gap between country j and Kazakhstan in year t	-	According to Linde’s demand similarity theory, the smaller the per capita GDP gap, the smaller the resistance of traded products to enter the countries of the two countries, and the smaller the international trade cost relative to the domestic trade cost, the greater the bilateral trade flow between the two countries.
D _i	Geographic distance		The greater the geographical distance between the two countries, the higher the cost and difficulty of the food trade.
E _jt	The level of economic freedom of country j	+	The higher the level of economic freedom of Kazakhstan's food trading partner countries, the lower the "hidden cost" of trade between the two parties
F _jt	Economic distance between trading partner countries and Kazakhstan	-	Economic distance is a measure of quantifiable policy costs, taxes, and investment, and financial freedom that are difficult to quantify between countries. The longer the economic distance, the greater the resistance to bilateral grain trade.
G _jt	Political distance between trading partner countries and Kazakhstan	-	Political distance refers to the influence of the political environment, political system, and power structure of the trading parties when conducting economic activities. The farther the political distance is, the greater the resistance to bilateral food trade is.
H _j	Language similarity between country J and Kazakhstan	+	Identical or similar cultures will increase the scale of bilateral trade and promote grain import and export trade
L _j	common boundary	+	Bordering with Kazakhstan can effectively reduce various costs in the food transportation process and promote the development of food trade
M _j	Landlocked country	-	The import and export of bulk grain in landlocked countries can only be limited to rail transport, which is more expensive than water transport
N _j	Join the WTO	+	Joining the WTO is conducive to improving the trading environment, attracting foreign investment, and bringing greater development markets and opportunities for food trade in various countries
O _j	CIS countries	+	Kazakhstan is a CIS country. If its food export partners are also CIS countries, there is less resistance to bilateral food trade.
P _j	Eurasian Economic Union	+	The Eurasian Economic Union is a supranational alliance planned to deepen economic and political cooperation and integration. If Kazakhstan is a member of the Eurasian Economic Union, bilateral trade resistance will be small.

Category	Specific Grain Classification
Class 10 (cereals)	1001 (Wheat and Meslin), 1002 (Rye), 1003 (Barley), 1004 (Oats), 1005 (Maize), 1006 (Rice), 1007 (Grain Sorghum), 1008 (Buckwheat, Millet, and Canary Seeds)
Class 11 (products of milling industry)	1101 (Wheat or meslin flour), 1102 (Cereal flours), 1103 (Cereal groats), 1104 (Cereal grains otherwise worked), 1105 (Flour, meal, powder, flakes, granules, and pellets of potatoes), 1106 (Flour, meal, and powder), 1107 (Malt), 1108 (Starches), 1109 (Wheat gluten)
Class 19 (preparations of cereals)	1901 (Malt extract), 1902 (Pasta), 1903 (Tapioca and substitutes therefor prepared from starch), 1904 (Prepared foods obtained by swelling or roasting cereals or cereal products)

Variable	Mixed OLS	Fixed effect	Random effect
	coefficient（p value）	coefficient（p value）	coefficient（p value）
In (GDP _it GDP _jt )	1.151^***（0.002）	2.216（0.120）	0.983^*（0.071）
In (POP _it POP _jt )	-0.971^**（0.016）	-6.016（0.207）	-1.005（0.129）
In (Gpcg _ijt )	-1.465^***（0.000）	-1.982^**（0.030）	-1.500^***（0.008）
In (Dis _i )	-3.114^***（0.000）	/	-2.751^**（0.016）
In (EF _jt )	0.137（0.935）	-1.223（0.684）	-1.842（0.447）
In (EDjt)	1.030^***（0.000）	0.099（0.725）	0.445^*（0.065）
In (PD _jt )	-0.421^*（0.094）	-0.391（0.207）	-0.235（0.374）
In (Lang _j )	-0.990^**（0.043）	/	-0.871（0.305）
Bord _j	-0.883（0.194）	/	-0.301（0.814）
Land _j	1.728^***（0.003）	/	1.503（0.283）
WTO _j	-0.870^**（0.038）	0.639（0.353）	-0.012（0.983）
CIS _j	0.510（0.406）	-1.173（0.259）	-0.388（0.639）
EEU _j	-2.346^***（0.003）	-1.881^**（0.012）	-1.863^***（0.008）
Cons	24.765^***（0.008）	127.295（0.175）	39.982^**（0.020）
R²	0.457	0.092	0.595
Samples	231	231	231
regression groups	21	21	21
F test /Wald chi2(13)	14.070	2.26	39.430
Prob > F/chi2	0.000	0.019	0.000

Variable	---------Same unit root test---------		--------------------------------Different unit root test---------------------------------
	------------Breintung test------------		---------------IPS test--------------			---------------ADF-Fisher test--------------
	Statistics	P-value	Statistics	P-value	Statistics	P-value
Y _ijt	-2.3917	0.0084^***	-2.4355	0.0074^***	14.6472	0.0000^***
GDP _it GDP _jt	-2.1862	0.0144^*	-1.8114	0.0350^**	4.1623	0.0000^***
POP _it POP _jt	-6.8656	0.0000^***	-1.6669	0.0478^**	8.8383	0.0000^***
Gpcg _ijt	-3.3569	0.0004^***	-1.4711	0.0706^*	3.8464	0.0001^***
EF _jt	-1.8125	0.0350^**	-1.6527	0.0492^**	4.9310	0.0000^***
ED _jt	-1.3698	0.0854^*	-3.8681	0.0001^***	10.4670	0.0000^***
PD _jt	-3.7548	0.0001^***	-1.4780	0.0697^*	6.9747	0.0000^***

Hypothetical test	Statistics	T value	P-value
H0：No cointegration relationship	Augmented Dickey-Fuller test	-9.1550	0.0000^***

Variable	Actual economic level (first stage)	Food export trade volume (second stage)
In (GDP _it GDP _jt )	-	0.727（0.192）
In (GDP _{it - 1} GDP _jt	0.991^***（0.000）	-
In (POP _it POP _jt )	0.008（0.366）	-0.731（0.277）
In (Gpcg _ijt )	-0.108（0.210）	-1.356^**（0.027）
In (Dis _i )	-0.001（0.949）	-2.392^**（0.037）
In (EF _jt )	0.069^*（0.065）	-1.339（0.582）
In (ED _jt )	0.012^**（0.016）	0.461^*（0.055）
In (PD _jt )	-0.009（0.109）	-0.234（0.377）
In (Lang _j )	-0.004（0.681）	-0.709（0.405）
Bord _j	0.010（0.524）	-0.021（0.987）
Land _j	0.029^**（0.025）	1.479（0.289）
WTO _j	0.001（0.872）	0.050（0.929）
CIS _j	-0.149（0.273）	-0.449（0.588）
EEU _j	-0.037^**（0.034）	-1.850^***（0.009）
Cons	0.078（0.703）	37.999^**（0.027）
R ²	0.999	0.594
Number of samples	231	231
Number of regression groups	21	21
F test /Wald chi2(13)	38469.39	37.99
Prob > F/chi2	0.0000	0.0003