KazGrain forecasts wheat harvest of 20 mln tons in Kazakhstan

Kazakhstan will have a good harvest this year, despite the difficult weather conditions in the spring and summer. It is necessary to harvest and dry it to provide grain and traditional markets for the country, and those countries that are now beginning to show interest in supplies from Kazakhstan. This will support domestic prices for agricultural products, providing sufficient profitability for farmers.

This forecast was shared with ElDala.kz portal by Kanat Kobesov, head of the board of the National Association of Exporters KazGrain.

– This year’s wheat harvest is expected to be good in terms of volume, and the quality will be much better than last year’s,” Kanat Kobesov said. – Plus, we have a fairly high carryover of food grain. In total, by the end of harvesting we will have a grain reserve of 25-26 million tons. Of this amount, more than 10 million tons will constitute our export potential for wheat.

Of course, all market participants are now concerned about whether Kazakhstan will be able to rhythmically ship these volumes for export. There are concerns about the demand for grain, and the ability of railroads to ensure timely transportation. Traders are optimistic about the prospects, as the government is ready to support exports. Among other things, now there is a discussion of the possibility of subsidizing transportation to increase the competitiveness of Kazakhstani wheat on the world market.

– Last week, we had two meetings with Deputy Prime Minister Serik Zhumangarin, who oversees these issues,” Kanat Kobesov said. – All bottlenecks of Kazakhstan grain trade were discussed. Systematic measures on wheat export are being worked out, including with the participation of KTZ in terms of transportation organization. Of course, the main strategy is to work with our traditional market, the countries of Central Asia. Plus, of course, China. There are also prospects for deliveries to new destinations through the Black Sea and Baltic ports, including North Africa. In addition, the European Union has imposed a barrier duty on Russian wheat in the amount of 95 euros per ton. And we have a chance to replace Russia in part of its former markets.

Given the fact that wheat quality has been affected by bad weather in many regions this year, including the European Union and Russia, interest in quality Kazakh wheat is expected to be high. This gives grain market participants reason to expect prices to rise from current levels.

– If now on wheat from Uzbeks we see an offer of $200 per ton at DAP Saryagash, then for the new harvest traders form a starting price of $230 for wheat of 4 class and $250-260 for ordinary 3 class, – said Kanat Kobesov.

The expert also noted that in addition to wheat, great prospects are already open for barley supplies to China. Now Chinese buyers offer $174 per ton of feed grain at DAP Alashankou, but in September the growth to $205-215 is predicted. Moreover, if buyers in Central Asia ask for deferred payments for two-three months, Chinese partners pay at once.

As for logistics, with the export potential of 10 million tons for the year, KTZ is quite capable of loading 800 thousand – 1 million tons per month. Of course, there is an element of uneven demand for railroad services by season, and operational headquarters have already been set up to regulate possible problems.

Tags: Kazakhstan, wheat, crop forecast