January 20, 2011

 

Kazakh grain harvest to improve after export dip

 

 

Kazakhstan is expecting a return to average crop volumes for 2011, reducing its grain export estimate to seven million tonnes in the current marketing year after its drought-affected yield fell below prospects in 2010.

 

The world's seventh-largest wheat exporter is forecasting a 2011 harvest of between 15 million and 16 million tonnes, helped by plentiful snow cover, said Sagintai Zhumazhanov, head of the Agriculture Ministry's agrotechnology policy unit.

 

While this would be a significant improvement on last year's 12.2 million tonnes, it would still fall far short of the record 20.8 million harvested in 2009.

 

"We have enough grain to provide for our own needs and have around seven million tonnes left over for export," Zhumazhanov said, referring to the current marketing year.

 

"We had planned to export eight million tonnes, but that was based on expectations of a crop of 13 million tonnes," he said. In the previous marketing year, which ended on June 30, 2010, Kazakhstan exported 8.4 million tonnes of grain.

 

Black Sea wheat shipments have fallen dramatically in the current marketing year after a summer drought ravaged crops across the former Soviet Union, prompting a rush from consumers in North Africa and elsewhere to secure alternative supplies.

 

High food costs are behind rioting in several North African countries and the unrest that toppled Tunisia's president. Algeria's state grains agency has bought around one million tonnes of wheat in the past two weeks to avoid shortages.

 

Kazakhstan, while limited in the volumes it can supply, could help to compensate for a shortage of Russian and Ukrainian wheat, said Zhumazhanov. Buyers would have to pay a premium, he said, due to the high grain quality and steep freight costs.

 

"They need to come to us, although it will be a little problematic as our grain is expensive. When there's a poor harvest in Russia and Ukraine, these countries always purchase from us. It's the law of the market," he said.

 

Russia's export ban has allowed Kazakhstan to gain a little market share. Ministry data shows that, in calendar 2010, non-CIS countries accounted for 55% of Kazakhstan's total grain exports, up from 50% in the previous year.

 

Three of Kazakhstan's 14 provinces account for about three-quarters of its grain output. Zhumazhanov said prospects for Kazakhstan's 2011 crop were reasonable after heavy snow cover in December replenished low moisture levels in the soil in the autumn.

 

From the start of the current marketing year on July 1 until January 10, Kazakhstan exported 4.2 million tonnes of grain, up from 3.8 million in the corresponding period last season, the ministry official said.

 

Azerbaijan became the biggest recipient of Kazakh grain in calendar 2010, he said, after purchasing 1.23 million tonnes. The country's other major, traditional markets are its Central Asian neighbours, Iran and Afghanistan.

 

Kazakhstan was considering building a new terminal on Iran's Persian Gulf coastline, which would offer an alternative onward route to Egypt and other Arab countries, he said. The project would cost around KZT3 billion (US$20.42 million), he added.

 

A new rail link to Iran via Turkmenistan is set to open this year, while the state-controlled Food Contract Corporation is a joint venture partner in a grain terminal in the Iranian port of Amirabad, on the Caspian Sea. Annual capacity is 700,000 tonnes.