January 11, 2011

Kazakhstan sees grain price stabilisation in next three months

Grain prices are expected to stabilise in the local market of Kazakhstan within the next two to three months, a managing director said Monday (Jan 10).

"The price for grain in the domestic market is expected to stabilise in the next two to three months. Before the Christmas holidays, the price increased to KZT42,000 per tonne (about US$280 per tonne), but today the price is KZT35,000 per tonne (US$250 per tonne)," Uvashev, National Grain Company JSC Food Contract Corporation's Managing Director for foreign economic activities, said.

Lowering grain prices is linked with several reasons, with one of them being the calm during the holidays.

"Second, millers secured a supply of grain for two to three months in advance, which will keep the price level," he said.

In addition, from January 1, 2010, Russia has opened its markets and intends to supply flour for export to all directions.

"First and foremost, Russia intends to resume flour deliveries to the market of Central Asia and Altai. It is our main competitor in these markets," he stressed.

Uvashev refrained to make any predictions on the price of wheat in the domestic market to more distant perspective, referring to a temporary lull in the domestic and world grain markets.

He confirmed data released by the Kazakh Statistics Agency that the price of wheat in 2010 increased by 37.5% in Kazakhstan. "The price of grain indeed increased compared to 2009. So, if in 2009, it was approximately KZT18,500 per tonne (approximately US$130) then in 2010, it was KZT26,600 per tonne (US$180), " Uvashev said.