World Food Programme raises alarm over lower remittances flowing to Kyrgyzstan

By bne IntelIiNews October 9, 2023

Kyrgyzstan’s remittances decreased by 28% y/y in 7M23, according to a food security report on the country produced by the World Food Programme (WFP).

Lower remittances can prove a substantial dilemma for Central Asia’s second poorest nation. Last year, they accounted for 30% of Kyrgyzstan’s GDP, with 80% coming from the Russian Federation. Russia’s economic struggles have lately become more challenging, hitting the hard currency amounts migrants can earn to send home.

The WFP noted: “Labour remittances play an important role in reducing poverty and inequality … [and] serving as an income source for 12.6 percent of the population: the poverty rate rises from 33.2 percent to 43.3 percent, and the extreme poverty level rises from 6 percent to 17.7 percent when income of labour migrants / remittances is excluded.”

The WFP also said that the Kyrgyz Republic continues to be exposed to market instability risks “due to its high dependence on imports of socially significant food commodities, particularly from Russia and Kazakhstan, where there is high volatility in wheat prices associated with drought and the termination of the Black Sea Grain Initiative (BSGI).

“In September 2023,
Russian Federation wheat export prices declined by 2 percent/ percentage points compared to August 2023, but remained 6 percent/ percentage points higher than in June 2023 prior to the termination of the BSGI. Meanwhile, export prices for wheat in Kazakhstan increased by 17 percent/ percentage points compared to August 2023. In order to stabilize the domestic market, the [Kyrgyz] Ministry of Agriculture (MoA) introduced a ban on exports of fodder (hay, straw, mixed fodder, bran and grain fodder), barley, and rice oats until March 2024. At the same time, the MoA developed a draft resolution of the Cabinet of Ministers on banning exports of wheat flour and wheat and submitted it for public discussion.”

The wheat export ban has since been introduced.

The growing of spring wheat crops in Kyrgyzstan continued under abnormally high temperatures, the WFP also observed, saying: “The gross yield of wheat is estimated to decrease by 29.7 percent and gross yield of barley may decrease by 43.6 percent compared to the same period of last year.

“The 2023/24 wheat output is expected at 520,000 mt – 7 percent lower than the annual average for 2018-2022 due to the larger area planted.”

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