Harvesting 2016 winter cereal crops, which account for around 95 percent of the total cereal production, will start in early June. Remote sensing data shows that rainfall has been above average during January to mid‑March, when crops break dormancy and vegetative growth begins, which is expected to benefit crop development. Good levels of precipitation will also be beneficial for the spring planting, which will start in May. Assuming that favourable weather will continue, FAO forecasts the 2016 aggregate wheat harvest (winter and spring seasons) to remain close to last year’s level at about 1.7 million tonnes. Overall, total cereal production, mainly wheat, barley and maize crops, is forecast at 2.7 million tonnes in 2016.

Favourable weather contributed to increased cereal production in 2015

According to latest estimates, the aggregate cereal harvest in 2015 stands at 2.71 million tonnes, 10 percent higher than in the previous year. Wheat production is estimated at 1.7 million tonnes, an increase of 16 percent compared to the reduced harvest in 2014. Barley and maize are estimated to account for 800 000 and 206 000 tonnes, respectively.

Cereal imports to decrease sharply in 2015/16 marketing year (July/June)

Following the 2015 bumper cereal harvests, the 2015/16 (July/June) cereal import requirements are expected to decrease more than 20 percent, compared with the previous year, to about 1.5 million tonnes.Imports account to about 40 percent of the country’s total domestic consumption. As in the past two years, the bulk of the imports in 2015/16 are expected to be from the Russian Federation. Prior to 2012/13, Kazakhstan was the main supplier of wheat and wheat flour to the country but the lower quality of the wheat from the past two harvests, together with higher prices in Kazakhstan, have led Azerbaijan importers to favour the Russian Federation as a source.

Prices of local wheat flour 50 percent higher in early 2016 than a year earlier

Prices of local wheat flour in January 2016 were 12 percent up from the previous month and almost 50 percent higher than a year earlier. Prices of imported wheat flour, which is generally more costly, was 30 percent higher than a year earlier. The price increases are largely due to the sharp weakening of the national currency. As of 15 January, the Government has exempted wheat, wheat flour and bread from the value added tax after widespread protests over the deteriorating economic conditions that have seen the prices of staples, such as flour and bread, rise steeply in recent months. The measure has been implemented to bring the prices of these foods down for consumers.

Source - http://www.fao.org