August 6, 2010

 

Kazakhstan may limit grain exports

 

 

Expecting a 35% decrease in this year's grain harvest, Kazakhstan will consider a request by customs union partner Russia to control exports at a meeting this month, according to the Economy Ministry.

 

Russia, suffering its worst drought in a century, will ban grain exports until the end of the year and plans to ask Belarus and Kazakhstan, its partners in a new trade bloc, to implement similar bans. "This issue will be discussed at a meeting of the Customs Union commission on August 17-18," the Kazakh Economy Ministry's press service said.

 

The ministry added that Kazakhstan, which ranks among the world's top 10 wheat exporters, had no immediate plans to ban grain shipments, a large proportion of which must cross Russian territory to reach ports on the Black Sea.

 

The Belarussian government declined to comment on the issue.

 

Kazakhstan, the largest wheat grower in Central Asia, has not suffered from drought to the same extent as Russia. Rains in July have aided crop development in the three regions of northern Kazakhstan that account for 80% of its wheat.

 

Though the Agriculture Ministry forecasts the 2010 grain crop, at 13.5 million tonnes, will be 35% below last year's record 20.8 million tonnes, the harvest will be close to the average of the last several years.

 

The high 2010 crop was the anomaly, the ministry has said.

 

Meanwhile, drought has destroyed crops on more than half the sown area in parts of western Kazakhstan, a less important region in terms of the overall crop.

 

Kazakhstan expects a 2010 wheat crop of about 10 million tonnes, while its exportable grain surplus in the current marketing year will be between six million and seven million tonnes, down from 8.3 million tonnes in the 12 months to June 30, 2010.

 

Traditionally, much of Kazakhstan's grain is delivered to Black Sea ports by rail via Russia, which adds to its cost, but the country has invested in bolstering its infrastructure on the Caspian Sea to diversify shipments.

 

The country traditionally supplies grain and flour to Afghanistan and its former Soviet neighbours in Central Asia, and is also looking to open a new export route to China.