Overview

Afghanistan has approximately 200 milling companies operating throughout the country. However, there are about 25 big milling companies who have the capacity to mill between 150 to 300 MT of WHF per day.

Lately, local Afghan traders have been importing WHF at a lower price from the surrounding countries. WHF production is cheaper in the neighbouring countries like Kazakhstan, Pakistan and others as they have sustainable electric power, better machineries and infrastructure. In general, imported WHF is sold between the range of $450 to $520 /MT. The local bakeries in major towns and cities buy the most expensive (high quality WHF) at $520/MT. Businesses located in rural areas buy the average quality of WHF by paying the average price around $485/MT. The lower quality imported WHF is purchased by individual households/families who make bread at home by paying $450/MT, and these individual households/families make the biggest market share. On the other hand, domestic milling industries sale their WHF around the mid-range price, as a result they automatically lose the biggest market share.

Associations/Unions

The milling industry has an association in Kabul which functions as a union representing the almost 200 domestic companies. The association does not interfere on price fixing, but rather operate with the government and other traders on ways to strengthen the milling industry so that they are can compete with the imported WHF. 

Due to regulations set by international institutions, Afghanistan cannot subsidise directly the domestic milling industry. Although it is estimated that the 200 plus milling companies have the capacity to produce WHF for the whole of Afghanistan, due to high competition with the imported WHF, the industry is not able to grow or even operate at full capacity. In fact, there are milling companies who only operate for seven months a year from June to December whenever there is local wheat grain harvest. But this approach has forced some millers to go out of business as it is not sustainable.

Regional Suppliers

WFP Vulnerability and Analysis Mapping (VAM):

http://vam.wfp.org/sites/mvam_monitoring/afghanistan.html

Pictures: WFP Archive