May 27, 2011

Kazakhstan spends on grain infrastructure

Kazakhstan, one of the world's top 10 wheat exporters, has put a lot of money on its grain infrastructure to enhance access to new markets and lessen its reliance on costly supplies across Russia.

Kazakh grain, though of high quality, is often uncompetitive against supplies from Russia and Ukraine due to the high cost of delivering to the port. Exporters frequently encounter a shortage of rail cars and can incur high fees leasing Russian wagons.

Kazakhstan plans to export six million tonnes of grain in the current marketing year to June 30, compared with 8.4 million tonnes in the preceding season.

Drought contributed to decline in last year's grain crop to 12.2 million tonnes from the record 20.8 million tonnes harvested in 2009. Kazakhstan expects to return this year to an average crop of between 15 million and 16 million tonnes.