Export of grain in Kazakhstan is the main theme of all agricultural and industrial complex in the face of growing production

Новость на Казах-зерно:

On May, 15 a big spring sowing of cereals was officially announced in the northern regions of the country, and on June, 5 farmers have already planted 99.7% of planned areas. Favorable weather conditions, undoubtedly, have contributed to the field works. But the significant role in this played growing skills, technical equipment and organization of the Kazakhstanian farmers.

“According to the provincial departments of agriculture, as of June 5, spring cereal crops in the country were sown on the area of 15,446,5 thousand hectares, or 99.7% of the schedule”, said the Ministry of Agriculture.

We remind, in general it is planned to plant crops on the area of 21.5 million hectares this year, 0.3 million hectares, or 1.3% higher than in 2011. The area of spring planting is projected at 18.8 million hectares.

Last year due to torrential rain storms in the North-Kazakhstan, Kostanai, Akmola and Pavlodar regions the spring planting was stretched until June 15, which, however, did not prevent from having a record harvest. This year, according to meteorologists, the great danger to the crop can make the lack of rain.

It is a little bit early to make predictions abbout the new harvest. So to make predictions at this time of the year – it’s like to “read the tea leaves.” But, nevertheless, the Minister of Agriculture Asylzhan Mamytbekov made such forecast. He said that this year the volume of harvest in Kazakhstan will be largely dependent on climatic conditions. We can collect about 16 million tons of grain. “USDA gives us 15-16 million, and they rarely make mistakes”, the minister referred to the omniscient Americans.

In general, seeds are laid into the ground, and we should wait for germination and development. In the meantime, cereals make their way to the light, we go back to the problems of the grain market, which have not gone away and continue to be on the agenda.

Kazakhstan

Just having started, for 20 days the spring sowing was completed in Kazakhstan. It began in a relatively favorable weather conditions – rain, how to order, watered the ground before and according to the hydro-meteorology, it was enough moisture in the soil for the emergence of high-grade shoots.

However, whatever big the crop is this year; old problems do not give to live peacefully. Let’s leave aside the problem of grain storage. We talked about it many times. Elevators, eventually, will be built sometime with the help of state aid or without it. More important problem seems one connected with the infrastructure restrictions for grain exports in terms of a steady increase of its production capacity.

Kazakhstan is interested in exporting grain as never before. Record crop in 2011 showed that the republic could grow crops in the tens of millions of tons, but the grain has actually nowhere to go except exports, including processed as flour. Even the livestock sector and the population, cannot consume such amount of grain and most of it will still have to be taken out.

Kazakh grain producers learn quickly. Even in bad weather, they learned how to grow a decent crop of wheat and barley, and are unlikely to give up on a mass scale of these currency bringing crops in favor of other, sale of which have not yet been fully debugged.

The increase in the average annual crops is evident. Based on these statistics data , we can do simple calculations. Thus, the average yield in the years 2009-11 was 12.5 quintals per hectare, in 2006-08 – 11.7 quintals / ha in 2003-05 – 9.9 quintals / ha. Following these figures, it is even unseemly to talk about productivity in the dashing 90’s. Thus, the average annual yield from 1991 to 2000 was only 8.4 quintals/ ha, or nearly one and a half times lower than in the past three years.

But corn producers are not going to stop on this. They will do more. They have a healthy desire to earn well and live a normal life. In addition, the competition pushes them to this, now on a global scale.

Therefore, the export of grain becomes the main theme of all grain production, if we will not increase the population and livestock quantity in the country two times in the next few years so that, as you know, it is extremely unlikely.

In the last review of the grain market, we reported that Kazakhstanian grain for the first time has gone by transit through the Iranian port of Shahid Rajai. The idea of using Iranian transit, finally, became a reality. The Iranian side agreed to annually export to the Middle and Far East around 300 tons of Kazakhstanian wheat through this port.

Designed for the transit Kazakhstanian wheat will be shipped at the port of Aktau, and from there delivered to the Iranian ports of Amirabad, Anzali and Nowshahr. Later, by rail and road it will be transported to the port of Shahid Rajai, where it is shipped to the Middle and Far East countries. The only weak point in this direction can be a small capacity of the grain terminal in Aktau, which could not cope with the flow even before the opening of this direction.

Such activation of Kazakhstanian exports to Iran has given a subject for Ukrainian colleagues to speculate on the possible extinction of Kazakhstanian grain from the Black Sea market. Will Kazakhstan leave the list of Black Sea grain suppliers? – they ask, and then reply: “Kazakhstan is betting on grain exports to Iran and is building the infrastructure for export in this direction. As a result, competition in the Black Sea region, presented by Russia, Ukraine and Kazakhstan, can be reduced by one third.

“One of the three leading suppliers of grain from the Black Sea basin can significantly reduce the activity in this direction. Kazakhstan identified Iran as a strategic market for the export of grain, which does not involve delivery through the Black Sea. This means that the level of competition in the Black Sea region can significantly decrease, remaining at the mercy of Russia and Ukraine.

Over the past few years, Kazakhstan has invested heavily in creating the infrastructure that will allow exporting grain to Iran and through Iran – in Persian Gulf countries. Major investments were directed to the construction of the railway, which passes through the territory of Kazakhstan, Turkmenistan and Iran, and allows us to deliver Kazakh grain deep into the country and transport it to the sea ports of Iran. In addition, the state grain company of Kazakhstan “Prodcorporation” got on lease a plot of land in Iran for the construction of grain elevator in addition to that the country already has in Iranian ports.

With the introduction in service a new railway, the possibility of delivery of Kazakhstanian grain to Iran will grow significantly – the volume of exports could reach 5 million tons. In addition, the Iranian market is advantageous taking into account solvency of local customers. This path is optimal, and paired with minimal logistics expenses.

They also remind us that in the case of grain flow redistribution in favour of Iran, Kazakhstan does not have to bear the additional costs of exporters, which are $ 40/ton that were compensated to traders by the state in order to ensure the competitiveness of the grain.

Новость на Казах-зерно:According to the experts of our agency, it is still in the air. Ukrainian wheat still cannot be a substitute for Kazakhstanian grain. Even with the revolutionary breakthrough of Kazakhstanian wheat to the southern seas, it will be present in the Black Sea and the Baltic. The key to this will remain constant buyers of Kazakhstanian wheat in Europe and North Africa.

The subsidies, for which colleagues-competitors of Kazakhstan on the Black Sea market are so jealous, will stay. This was stated by Minister of Agriculture of Kazakhstan. He said that government will continue to subsidize the transport costs for exporters by reducing their volume up to 4,000 tenge per ton from the previous 6000 tenge, and it will allow exporting an additional 2.5 million tons of grain – he said.

Kazakhstan plans to export record since independence years 13 million tons, to build new elevators and to diversify grain production in the current season, said Minister of Agriculture Asylzhan Mamytbekov.

In the second half of May wheat futures contracts on the ETS Exchange in Almaty rose significantly in all delivery periods, except the contracts for execution in July.

On May, 15 prices of wheat futures of 3 class were as follows:

Terms of the contracts

June

July

August

September

October

November

22 210

21 500

21 730

22 690

23 170

23 500

During the period from May, 15 to June, 4 wheat contracts with the execution in June  increased by 1290 tenge per ton, with the performance in August –  by 2270 tenge, in September – by 1810 tenge, in October – by 1830, and in November – by 2,000 tenge per ton of wheat of 3class.

The values of wheat futures on the ETS exchange according to delivery month as of June 4, 2012 (tenge per ton)

 

Terms of the contracts

June

July

August

September

October

November

23 500

21 500

24 000

24 500

25 000

25 500

In the market of cash sales of grain and flour for the period from May, 17 to June, 4 the prices of wheat in Kazakhstan decreased by about 200 – 230 tenge per ton in the different regions of the country. Barley also falls, approximately, by the same sum.

Given the strengthening of the dollar against major world and regional currencies, including the tenge, these cereals have lowered their price even more. The fall of the dollar was about 2.2 – $ 3 per ton, or 330 – 420 tenge per ton at the exchange rate of National Bank of RK.

Falling prices can be explained by an increased supply of grain taking into account abundant stocks. Grain producers, by getting rid of seeds stocks during the planting season, are trying to free up storage for the reception of new harvest and realize a surplus.

Новость на Казах-зерно:Flour market is still overstocked, but the price dynamics became controversial. Prices for flour of extra class continued to decline, and first- and second-rate flour during this period on the contrary strengthened. Price bracket of extra class flour dropped by about 150 – 200 tenge, and in dollar terms by about 3 – 3.2 dollars per ton.

First-rate flour on the contrary increased with a large range of growth in different regions of Kazakhstan – from 600 to 1,700 tenge per ton. Second-rate flour also rose from 1600 to 2500 tenge per ton in different regions. Higher prices for lower grades of flour due to higher demand of the flour for export, mainly to the countries of Central Asia, where such flour is a product of mass demand. In contrast to the extra class flour, the demand for which is limited due to low purchasing power of consumers.

Increasing the price of this flour is seasonal in nature. Reserves of grain, from which such type of flour is made, in the Central Asian countries dried up or coming to an end. Hence, the growth of demand for the flour. The situation will change very soon, when the Central Asian markets will receive grain from new harvest. The beginning of the harvesting campaign in Central Asia is not far off.

Currently, you can buy wheat of 3 class from new harvest in Astana for 23,900 tenge ($160.6) per ton. It is 200 tenge lower than of June, 4. The wheat of 4 class is sold by 21,500 ($144.5). First-rate flour in the capital of our country costs 37,400 tenge ($251.4) per ton – the increase was for 1100 tenge. Second-rate flour is sold by 35,100 tenge ($235.9) per ton, and flour of extra class – by 39,700 tenge ($266.9) per ton.

A ton of wheat of 3 class can be purchased for 23,200 tenge ($ 155.9), wheat with gluten content above 27 percent – for 26,300 tenge per ton ($ 176.7), wheat of 4 class – 19,500 tenge ($131), barley of a 2 class now costs 22,600 tenge ($151.9) per ton in Akmola region. Flour of extra class costs 39,400 tenge ($ 264.9), first- and second-rate flour is offered at 37,100 tenge ($249.3) and 34,800 tenge per ton ($ 233.9), respectively.

In the North Kazakhstan region wheat of 3 class is sold by 22,600 tenge ($ 151.9) per ton, wheat with gluten content above 27 percent – by 25,000 tenge ($168), wheat of 4 class –  by 19,100 tenge ($128.4). The current price of barley is 22,100 tenge per ton ($148.6). In the North Kazakhstan the price of flour of extra class is 38,000 tenge per ton – minus 200 tenge ($255.4), first-rate flour costs 35,700 tenge ($240) and second-rate flour costs 33,400 tenge per ton ($224.5).

In Kostanai region the price of wheat of 3 class dropped to the level of 23,400 tenge per ton ($ 157.3). Wheat with gluten content above 27 percent is sold by 25,800 tenge ($173.4). Wheat of 4 class costs 20,100 tenge ($135.1). The price of barley of 2 class is 21,800 tenge ($146.5) per ton. The market price of flour of all classes also went down. The average price of flour of extra class is 38,000 tenge ($255.4) a ton, first-rate flour costs 35,700 tenge ($ 240) a ton, second-rate flour costs 33,400 tenge ($224.5) a ton.

In Pavlodar region the price of wheat of 3 class is 23,900 tenge per ton, or $ 160.6 per ton; wheat of 4 class is sold by 21,500 tenge ($144.5). The price of barley is 24,000 tenge ($ 161.3) per ton. Flour of extra class costs 40,100 tenge ($269.5) per ton, first-rate flour costs 37,800 tenge ($254.1) per ton, second-rate flour costs 35,500 tenge ($ 238.7) per ton.

In Karaganda region wheat of 3 class costs 25,500 tenge ($171.4) per ton, wheat with gluten content above 27 percent costs 26,900 tenge ($180.8) per ton; wheat of 4 class costs 21,400 tenge ($143.8). The price of barley is 23,700 tenge ($159.3) per ton. In Karaganda, traders sell flour of all rates at the following prices: first-rate – 37,400 tenge ($251.4) per ton, second-rate – 35,100 tenge ($ 236) per ton and extra class – 39,700 tenge ($266.9) per ton.

Over the past period the cost of wheat in the East and West Kazakhstan went up. The price of wheat of 3 class in EKR is 24,100 tenge ($162) per ton, barley- 22,800 tenge ($153.2) per ton. In the West region of the country the price of wheat of 3 class fixed at 25,000 tenge ($168) per ton. The cost of first-rate flour in East Kazakhstan is 37,500 tenge ($252) per ton, second-rate flour costs 35,200 tenge ($236.6) per ton, and flour of extra class – 39,800 tenge ($267.5) per ton. In the West Kazakhstan prices for flour are the following: first-rate – 37,500 tenge ($252) per ton, second-rate – 35,200 tenge ($236.6) and extra class – 39,800 tenge ($267.5) per ton.

In Almaty region the price of wheat of 3 class for today is offered by 25,200 tenge ($169.4) per ton, wheat of 4 class – by 23,400 tenge ($157.3); barley of 2 class is sold by 23,500 tenge ($158) per ton. The cost of flour of extra class in this region is 40,400 tenge ($271.6) per ton, first-rate –38,100 tenge ($256.1) per ton, second-rate – 35,800 tenge ($240.7) per ton.

In Zhambyl region the price of wheat of 3 class for today costs 25,300 tenge ($170) per ton, barley of 2 class is sold by 24,100 tenge ($162) per ton. The cost of flour of extra class in this region is 40,100 tenge ($269.5) per ton, first-rate –37,800 tenge ($254.1) per ton, second-rate – 35,500 tenge ($238.6) per ton.

In the South Kazakhstan region wheat of 3 class is offered by 25,600 tenge ($172) per ton, wheat of 4 class – by 22,400 tenge ($150.5), barley – by 22,600 tenge ($151.9) per ton. The cost of flour of extra class in this region is 40,600 tenge ($272.9) per ton, first-rate – 38,300 tenge ($257.4) per ton, second-rate – 36,000 tenge ($242) per ton.

In Aktobe region wheat of 3 class is offered by 25,700 ($172.8). Flour of extra class can be purchased for 41,000 tenge ($275.6) per ton, first-rate – 38,700 tenge ($260.1) per ton, second-rate – 34,600 tenge ($244.6) per ton.

In Kyzylorda region wheat of 3 class is sold currently at 25,000 tenge ($168) per ton. The cost of flour of extra class is 42,800 tenge ($287.7) per ton, first-rate – 40,500 tenge ($272.2) per ton and second-rate – 38,200 tenge ($256.8) per ton.

In the south capital, Almaty, you can buy wheat of 3 class by 25,600 tenge ($172) per ton. Flour of extra class costs in Almaty 42,100 tenge ($283) per ton, first-rate – 39,800 tenge ($267.5), and second-rate – 37,500 tenge ($252) per ton.

The dynamics of grain and flour prices on export boundaries of the republic is a little bit different. Wheat of 3 class increased by about $ 1 per ton. Wheat with higher gluten content has also increased by about $ 1 per ton.

But wheat specified for export from SURW stations, on the contrary, decreased by approximately $ 4 per ton, including due to strengthening of the dollar. Barley stayed in the same price range, and decreased by approximately $ 5 per ton at the SURW.

Prices of Kazakhstan wheat, barley and flour on the export the borders of the Republic were formed as follows:

The cost of wheat of 3 class with gluten content of 23 percent on DAP terms at the station Lugovaya (Kazakhstan – Kyrgyzstan) is $199 per ton, with gluten content of 27-30 percent – $211 per ton. Barley costs $176 per ton. Flour of extra class is sold by $273, the cost of first-rate flour is $259 and the second-rate -$245 per ton.

At the elevators of the South Ural railway the current cost of wheat of 3 class is $ 169 a ton, wheat with gluten content above 27 percent – $185. The price of barley there is $146 per ton. Flour of extra class can be bought by $253, first-rate flour is $239 and the second-rate -$225 per ton.

At the station Sary-Agash (Kazakhstan – Uzbekistan, DAP) wheat of 3 class costs $201, wheat with gluten content above 27-30 percent – $224. The price of barley there is $181. Flour of extra class can be bought by $274, first-rate flour is $260 and the second-rate -$246 per ton.

Новость на Казах-зерно:At the station Tobol (DAP) wheat of 3 class costs $189, wheat with gluten content above 27-30 percent – $201. Barley is sold by $151 per ton. Flour of extra class can be bought by $251, first-rate flour is $237 and the second-rate -$223 per ton.

At the station Amuzang (Uzbekistan – Tajikistan, CPT) – the cost of wheat of 3 class is fixed at $250 per ton; wheat with gluten content above 27-30 percent is sold by $263 per ton. Flour of extra class is offered by $312, first-rate flour is $300 and the second-rate -$282 per ton.

The average price of wheat of 3 class at the the station Hajraton (Uzbekistan – Tajikistan, CPT) is $257 per ton; wheat with gluten content above 27-30 percent is sold by $256 per ton. Barley can be bought by $239 per ton. Flour of extra class is offered by $328, first-rate flour is $313 and the second-rate – $293 per ton.

At the station Sarahs wheat of 3 class on the CPT terms is sold by $256 per ton; wheat with gluten content above 27-30 percent is sold by $262, barley – $248. Flour of extra class is sold by $336, first-rate flour is $321 and the second-rate – $300 per ton.

In the port of Aktau on FOB conditions wheat is sold by $228, wheat with gluten content above 27-30 percent is sold by $ 251, barley – $ 226. Flour of extra class is sold by $288, first-rate flour – by $274 and second-rate – by $260 per ton.

Reference: $1 = 148.83 tenge, 1 euro = 184,79 tenge, 1 ruble = 4,46 tenge, 1 som = 3.16 tenge, 1 pound sterling = 228.07 tenge, 1 hryvna = 18,42 tenge.


Alimbek Gabitov

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