April 21, 2012

 

 

Following its struggle to export last year's bumper crop despite of a shortage of rail wagons, Kazakhstan looks set to retain huge inventories of grain heading into 2013.

 

The land-locked country on Tuesday (Apr 17) cut to 11-12 million tonnes, from 15 million tonnes, its forecast for grain exports in 2011-12, citing "delays in sourcing rail cars" for transporting crops for shipment, typically achieved through Russia's or Ukraine's Black Sea ports, or to Iran across the Caspian sea.

 

"The March holidays affected work at elevators and on the railways, and the tempo slowed a little," farm ministry official Anna Buts added.

 

The forecast leaves the country facing huge stocks of the grain at the close of 2011-12, following a 27 million-tonne harvest last year, a post-Soviet record. Kazakhstan uses domestically less than 11 million tonnes of wheat and barley, its two main grains.

 

Inventories could end 2011-12 at 8-10 million tonnes, Pierre Begoc, director at Agritel's Kiev office, said, while adding that accurate estimates were difficult thanks to a dearth of data from elevators in remote areas.

 

"That's before the next harvest, for which farmers are planning the same acreage as last year," sowings of some 15.5-15.6 million hectares, Begoc told Agrimoney.com.

 

Even at a yield of one tonne per hectare, the crop would top 15 million tonnes, and could easily exceed 20 million tonnes. The USDA's Astana attaché earlier this month forecast a combined barley and wheat crop this year of 17.1 million tonnes, down one-third year on year.

 

With inventories already taken up by existing crop, this appeared a recipe of "large losses" in grains as farmers struggle for storage space, and for soft prices, unless a "force majeure" , such as a 2010-style drought, strikes, Begoc said.

 

Even in an average year, Kazakhstan has a shortfall of some two million tonnes in storage space, according to the official Food Contracting Corporation, which estimating available capacity at 13.8 million tonnes.

 

Last year, producers turned to rail cars for storage to avoid leaving grain on the ground - or unharvested.

 

The government has attempted to ease the squeeze by funding elevator construction, besides subsidising exports by up to US$40 a tonne and investigating rail expansion to promote exports to neighbouring countries such as China.

 

Nonetheless, the extent of stocks mean Kazak wheat prices have remained weak by international standards, standing at US$175 a tonne on the Russian border as of mid-March, and US$229 a tonne at the port of Aktau, the USDA attaché said.

 

Egypt, the top wheat importer, was at the time paying more than US$260 a tonne, excluding freight, for grain from North America, with Ukraine supplies offered at US$275 a tonne.