September 28, 2011

 

Kazakhstan to ship a minimum of 2.5 million tonnes of grains

 

 

Kazakhstan will be allowed to ship a minimum of 2.5 million tonnes of their grain harvest in the last three months of 2011 and maintains its position as the next season's major exporter, a senior industry official said on Tuesday (Sep 27).

 

Nurlan Tleubayev, president of the Grain Union of Kazakhstan, said the 2011 harvest would be sufficient to meet domestic demand and leave a "substantial" amount for export.

 

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.

 

Kazakhstan, the world's seventh- or eighth-largest wheat exporter in a typical season, is forecasting a grain harvest approaching 25 million tonnes this year, which would be the biggest since independence from the Soviet Union 20 years ago.

 

Kazakhstan harvested 20.8 million tonnes of grain in 2009, its current record. The crop declined to 12.2 million tonnes last year due to the severe drought that affected large swathes of the former Soviet Union.

 

The government, forecasting an exportable surplus of more than 10 million tonnes, will subsidise exports this season to help Kazakh suppliers compete with Russian and Ukrainian wheat and avert the build-up of a domestic grain glut.

 

Traditionally, the vast distances from Kazakhstan's landlocked fields to ports on the Black and Baltic Seas impede the country's ability to compete with its former Soviet rivals.

 

This season, the government will subsidise Kazakh exporters by paying US$40 a tonne of the cost of shipping grain by rail to sea ports. The subsidies will apply on volumes of up to a total 2.5 million tonnes.

 

Agriculture Minister Asylzhan Mamytbekov said the early decision to subsidise rail tariffs, taken in August, meant that exports could start moving quicker than in 2009, when the decision to prop up transport costs was taken only in October.

 

"Rail tariffs have already been reduced. This has allowed the export of our grain via ports on the Baltic and the Azov-Black Sea basin," Mamytbekov told the cabinet meeting.

 

"The export potential could be more than 10 million tonnes this season," the minister said.

 

"The traditional buyers of Kazakh grain -- Central Asian countries, Afghanistan, Iran -- could import around six million tonnes and we should sell the remaining volumes on the Baltic and Black Seas."

 

This is already evident in Egypt, the world's largest wheat importer, which bought 300,000 tonnes of Russian and Kazakh wheat last week for Nov. 11-20 shipment.

 

Tleubayev, the grain union head, said the bumper harvest would allow Kazakhstan to export between 8.5-9 million tonnes of grain in the current season which runs until June 30, 2012. Shipments could continue comfortably into the following season, he said.

 

"Even if the crop were to be less next year, we would be able to export 8-9 million tonnes for two consecutive years," he said.

 

Kazakhstan exported 5.9 million tonnes of wheat and flour in the 2010/11 season, down from 8.4 million tonnes in the preceding 12 months.

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