May 12, 2010

Kazakhstan to resume grain exports to Asia

Kazakhstan is planning to export up to three million tonnes of grain to East and Southeast Asia after China lifted the ban on such exports passing through its territory at the start of this year, according to local news.

Kazakhstan will export a total of two million tonnes of grain to South Korea this year, President Nursultan Nazarbayev announced during a visit to Seoul on April 22. Imports to Southeast Asian countries which have fast-growing populations and little available arable land are also increasing.

Kazakhstan's Contract Food Corporation, part of state holding company KazAgro, signed an agreement with China Cereals, Oils and Foods Corporation (Cofko) to export 20,000 tonnes of wheat during the spring of 2010; 50% of the total was delivered during the first two months of this year. "In 2011-12, construction of a grain terminal on the Chinese border at Kostyk-Alashankou or Khorgos is planned. The terminal will have capacity of around 500,000 tonnes, and will include an elevator with storage capacity of 25,000 tonnes," says Zhanna Baitemirova, head of the analytical service at KazAgroMarketing.

Although China is a major grain producer, there are already signs the country will substantially increase imports this year, with Chinese companies having already signed contracts for additional imports from the US and Australia in early 2010.

Beijing is also very interested in using Kazakh lands to produce crops for Chinese consumption, which is likely to have been a factor in the decision to open up the country to Kazakh exports. However, this is an extremely contentious issue in Kazakhstan, with rumours of Chinese land purchases sparking rare demonstrations in Almaty. Kazakh government officials insist the law prohibits the sale of land to foreigners, but are considering leasing land to China.