Kazakhstan to cut coal exports ahead of winter
Kazakhstan plans to ban the export of coal by road transport for six months to avoid a repeat of the shortage caused by rushed purchases during last year’s heating season. The Ministry of Industry and Infrastructure Development said in a decree that the ban on taking coal out of the country in trucks and cars will begin on August 1. Other forms of fuel used for heating homes, such as briquettes and pellets, are also subject to the ban.
In introducing the ban, the ministry specifically recalled the events of September, when a sharp, non-seasonal cooling in temperatures triggered a sudden increase in demand for coal and caused a shortage.
“Unscrupulous traders exploited this situation during the peak coal buying season and ‘inflated’ their prices. They bought at 13,000 tenge ($27) a ton and sold up to 30,000 tenge a ton. This had a negative impact on the population,” reads an explanatory note attached to the decree.
The cold September conditions led many to desperate acts. People lined up for hours hoping to get enough groceries to keep their families warm. In October, a resident of the eastern town of Oskemen threatened set oneself on fire after failing to buy coal for days. Two weeks later, still in the same town, a man tent to search the doors of a coal sales depot.
It remains to be seen whether the export restriction will be enough to prevent a repeat, as there is no consensus on what caused the problem in the first place.
In November, Beibut Atamkulov, then Minister of Industry insisted reporters that coal shipments to the regions were proceeding as planned. He said any observed shortages were artificially created, although he refrained from suggesting who might have been behind it.
Economist Petr Svoik took a similar line, suggesting in a interview to the Tengri news site that “someone is deliberately withholding coal deliveries from the market and waiting for prices to rise [on the domestic market].”
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Others blame producers for selling overseas. Even though coal production in January-July 2021 was about the same as the previous year, exports increased by 30%, according to the economic intelligence agency Energyprom.
As noted by the Ministry of Industry, coal sales to Uzbekistan in 2021 increased by 30% compared to the previous year. More than one million tonnes were shipped to Kyrgyzstan, an increase of 19% compared to 2020. Of this total volume delivered to Kyrgyzstan, 89% was transported by rail, while the rest was transported by road. Similar figures were not provided for Uzbekistan.
But no one buys as much as Russia. Of the 16 million tons of coal that Kazakhstan exported in January-July last year, more than 10 million went there.
And it is suspected that even more arrived in the north by means of undeclared road freight. Farmers recently asked the government to ban the import of cheaper Russian wheat by road, as it is a common way for this and other sought-after types of goods to be smuggled into Kazakhstan. Producers fear their harvest will not be able to compete with cheaper, lower-quality Russian grain.
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