Kazakhstan has announced that it expects to produce up to 13.5 million tons of wheat this year, a development that should spell good times for the country’s farmers.

Growers of the crop, however, are concerned that imports of relatively cheaper Russian agricultural goods may wipe away their earning and even cause them to lose money.

Speaking at a press conference on July 26, Agriculture Minister Yerlan Karashukeyev presented the output forecast as a positive achievement for the farming industry.

 “Our wheat production forecast for this year is 13-13.5 million tons. Compared to last year, the harvest will be about 15-20 percent bigger,” Karashukeyev said.

The bumper yield appears to be the result of an unusually rainy spring in Kazakhstan.

As Karashukeyev explained, of the typical annual output of 12 million tons of wheat, around half is earmarked for domestic consumption, while the remainder of the harvest is exported either in its raw form or as flour. Around 7 million tons will be exported this year, he said.

The main buyer of Kazakh wheat exports is neighboring Uzbekistan. According to shipment data from the first quarter of this year, the Uzbeks cornered around 40 percent of Kazakh exports. Iran and Afghanistan are the second- and third-largest buyers, according to economic monitoring agency Energyprom.

At the moment, Kazakhstan’s wheat is subject to export restrictions. Between July 5 and the end of September, only 550,000 tons of the product may be sold abroad. That quota was introduced in April to shore up domestic food security in the wake of the war waged by Russia and Ukraine, both of which are also important global grain suppliers, and was later extended.

The Grain Union of Kazakhstan, a lobby group, told Eurasianet that the quota was designed with the export potential of farmers in mind and should not, accordingly, adversely limit their profit potential.

The danger to farmers comes instead from the influx of cheaper wheat from Russia. Shortly after invading Ukraine, Russia declared it was suspending grain exports, including to its closest economic partners, but the ban on deliveries to Kazakhstan ended on July 1.

“Russia will have a record harvest this year of more than 90 million tons of wheat. Some of this output will be sent to Kazakhstan, both legally and through gray schemes,” Yevgeny Karabanov, founder of the Petropavlovsk-based trading company Northern Grain, told Eurasianet.

As Karabanov noted, domestic grain prices in Kazakhstan have already fallen by 17 percent since the start of July due to Russian imports. This trend will continue, he said.

Smuggling is substantial. Karabanov said that comparing grain crop export certificates issued by health and safety officials of Kazakhstan and Russia for the agricultural year ending on June 30 revealed a discrepancy of 1.2 million tons. That suggests this amount was brought into Kazakhstan unlawfully. In the previous year, around 800,000 tons were smuggled that way, he said.

Karabanov said smuggled grain is then sold on to buyers in Uzbekistan, Tajikistan and Afghanistan at rates undercutting those offered by Kazakh suppliers.

“This not only causes losses to the [state] budget due to non-payment of customs taxes; it also means an annual $400 million shortfall in income for our producers,” he said.

The Grain Union of Kazakhstan has pleaded with the government to implement a ban on the import of agricultural goods via roads, which is how most crops are smuggled.

“If the authorities really care about food security in the country, then they should listen to us and protect our agricultural industry,” Karabanov said.