Overproduction threatens Kazakhstan's grain market

This year, problems of an oversupplied grain market in Kazakhstan are expected to become even worse.

In the autumn period of 2010, general grain offer volumes at the level of 25-26 million tonnes will cause oversupply on the domestic market, which will depress grain prices, according to Lilia Musina, deputy chairman of the Board of the JSC National managing holding KazAgro.

Kazakh agricultural commodity producers continue expanding grain sowing areas. During the period from 2004 to 2009, the annual growth of grain production was caused by the increase of additional sowing areas, said Musina.

The unfavourable situation of the world grain market can also lower Kazakh grain export volumes from the estimated level of 10 million tonnes, to 6.5 million tonnes, said Musina.

In the near future, Kazakhstan has to change its wheat mono-production policy, and stimulate the increase of sowings of oilseeds and other industrial crops. Such diversification of agricultural production will protect agricultural producers from selling problems and price reductions.