August 29, 2011

 

Kazakhstan's state grain trader sees bumper yield

 

 

The state-owned grain trader of Kazakhstan projected a 55% growth in the country's 2011 crop and said Friday (Aug 26) that the state would subsidise shipment costs to trigger wheat exports via distant ports.

 

The Food Contract Corporation (FCC), which buys and sells grain to regulate domestic supply and demand, expects Kazakhstan to harvest around 19 million tonnes of grain by clean weight in 2011, said Chief Executive Beibitkhan Kabdrakhmanov.

 

Kazakhstan, the world's seventh- or eighth-largest wheat exporter in a typical season, harvested 12.2 million tonnes of grain in 2010 as severe drought across much of the former Soviet Union slashed output from a record 20.8 million tonnes in 2009.

 

Black Sea grain exports are expected to recover this season as favourable weather restores crops in Russia and Ukraine, keeping prices at a level that allows both countries to regain markets in the Middle East and North Africa from competitors.

 

Kabdrakhmanov said the FCC would purchase grain from the new crop at a price of KZT25,000 (US$171) per tonne. "We have been instructed to buy 5 million tonnes of grain from the new crop this year," he said.

 

He said Kazakhstan, whose potential to supply world grain markets is limited by the vast distances to Black and Baltic Sea ports, was also prepared to subsidise wheat exports of up to 2.5 million tonnes by paying US$40 a tonne of the transport cost.

 

Kazakhstan's carry-over stocks from the previous season totalled around 3 million tonnes, he said. When added to the forecast 19 million tonne crop in 2011, the country would have 22 million tonnes of grain available in the season to June 2012.

 

"If we take eight million tonnes for domestic consumption and six million tonnes for supply to our traditional markets, then we are left with eight million tonnes that can be sold on the market," he said.

 

Kazakhstan exported 5.9 million tonnes of wheat and flour in the season to June 30, 2011, down from 8.4 million tonnes in the previous 12 months. Its biggest export markets are traditionally its Central Asian neighbours, as well as Azerbaijan and Turkey.

 

Agriculture Minister Asylzhan Mamytbekov has forecast Kazakhstan's grain export potential at more than 10 million tonnes in the current marketing year.

 

The minister's latest forecast for the 2011 grain crop is 18.9 million tonnes. Making this prediction on August 22, he did not specify whether this was by clean weight or bunker weight.