Kazakhstan to subsidise transport of grain exports

 

 

The government of Kazakhstan will spend more than US$33 million this year alone to subsidise the high transport costs of grain exports to make them competitive on the global market, an agriculture ministry official said.

 

Kazakhstan, a flat country the size of Western Europe with a population of only 16 million, has ranked sixth or seventh among the world's wheat exporters in the last few years and is aiming to join the top five.

 

But its remote location and high transport costs have hampered these aspirations.

 

Arman Yevniyev, deputy agriculture minister said the government would spend five billion tenge (US$33.6 million) this calendar year to cover some of the costs for exporters.

 

He said the subsidies will make the grains competitive in the ports of the Black Sea and the Baltic Sea.

 

He gave no details of the exact mechanism of the plan.

 

Kazakhstan's only coast is on the landlocked Caspian Sea, and access to Black Sea ports via Russia and Ukraine has been restricted as its ex-Soviet neighbours have stepped up their own shipments.

 

Russia, Kazakhstan and Belarus last week reached an agreement to set up a new customs union from mid-2010, creating common external tariffs and a single market for 165 million people -- a move that could help boost Kazakh grain exports.

 

Kazakhstan expects grain exports of 10 million tonnes in the 2009-2010 marketing year, Yevniyev said.

 

The former Soviet nation, which traditionally exports grain to other parts of Central Asia and nearby markets such as Iran and the Caucasus, has harvested about 20 million tonnes of grain in clean weight this year -- a big rise from last year's crop which was 15.6 million tonnes.

 

Yevniyev added that two million tonnes of grain out of that total would be shipped through Black Sea and Baltic ports.