Kazakhstan’s Ministry of Agriculture forecasts wheat price growth

The Ministry of Agriculture has revised plans to reduce the forward purchase of wheat until 2030, which is carried out by Prodkorporatsiya, due to the current situation on the country’s grain market. Low prices and large volume of harvested grain do not allow agrarians to sell their products profitably. However, during this marketing year, the Ministry of Agriculture predicts a change in the situation.

“An increase in the price of wheat is expected in the marketing year 2024/25, as competitors (Russia) of Kazakh wheat announced a decrease in forecasts of gross grain harvest and, accordingly, export potential,” – says the commentary of the Ministry of Agriculture to the draft government resolution on amendments to the Development Plan of Prodkorporatsiya for 2021 – 2030 years.

To support farmers, the Ministry of Agriculture revised plans to reduce the share of wheat in the total funding of Prodkorporatsiya programs. In 2024, monoculture will take 95% of the share of procurement (previously planned at 81%), 92% in 2025 (was 80%), 89% (79%) in 2026, 85% (78%) in 2027, 82% (77%) in 2028, and 78% (76%) in 2029. In 2030, wheat will account for 75% of the products purchased, as previously assumed.

The Ministry of Agriculture explained that a significant drop in the quality of the grain harvest in 2023 led to a shortage of milling wheat. The ministry also took into account that farmers in Kazakhstan are experiencing the second difficult year in a row – in 2023 there was a drought in the summer and heavy rains during the harvest, and in 2024 many areas suffered from floods. Due to insufficient financial resources (loans, prolongation), agrarians still prefer wheat, as it is cheaper to sow compared to other crops.

The document also outlines plans for further financing of forward purchase of agricultural crops. In the current year, the amount of financing has been reduced from the planned 100 billion tenge to 40 billion tenge. 30 billion tenge is planned to be allocated from the national budget in 2025. And in 2026 – 2029, the Prodkorporatsiya plans to finance the sowing season from the funds received from the sale of grain purchased a year earlier.

1 US dollar = 522 tenge.

Tags: Kazakhstan, prices, wheat