February 1, 2012

Kazakhstan's wheat exports face logistics woes despite Russia's withdrawal

Kazakhstan's wheat exports continue to face logistic woes, hampering the increase of large shipments into the Black sea port despite Russia's withdrawal in the wheat export competition in market.

The USDA said the pace of Kazakh wheat exports is quickening as Russia's shipments have slowed down considerably after the country maintained a "very rapid pace" of exports in the first half of the 2011-12 marketing year.

Preliminary indications show Kazakh wheat exports reached 1.3 million tonnes in December, compared to 600,000 tonnes on-year, the USDA said, with the bulk of exports going to other Former Soviet Union countries.

However, the USDA added that logistical problems mean Kazakhstan has struggled to increase these levels further, as traders have waited months for grain rail wagons due to a shortage.

In addition, there have been problems with elevators even when rail wagons are available, with many closed for 10 days due to New Year holidays, leaving wagons unused and traders anxious to get access to their grain.

The government did announce help in the form of a transportation subsidy of US$40/tonne for shipment to Black Sea and Baltic ports, but the USDA said traders report that the amount allocated was quickly used up and no additional subsidy is being offered.