Grain prices in Kazakhstan are growing, and forecasts for its harvest in 2012 are melting

Новость на Казах-зерно:

President Nursultan Nazarbayev instructed the Minister of Agriculture Asylzhan Mamytbekov to control grain prices in the country. The consequences of drought in Kazakhstan and export demand may cause price shock in the domestic market.

“It is important to monitor the level of grain prices in the domestic market. The Government will provide comprehensive assistance to agriculture. In this situation it is necessary to work efficiently and orderly “, – said Nursultan Nazarbayev.

Kazakhstan’s President pointed out that there is the need to strengthen preparations for the harvest campaign, in particular, to explore issues related to the provision of fuel and lubricants, agricultural machinery, equipment, and providing grain growers with seeds for next year.

“The current crop year is going in drought conditions. This happens not only here but also in Russia, America and Europe. In the past year we got a record harvest, but this year will be difficult for the agriculture”, the President said.

The new week pushed grain harvest figures down. Now, the official forecasts appear the following way. According to the forecast balance for the current year farmers will harvest about 12.8 million tons of grains with an average yield of 8.1 quintals per hectare.

We remind, just last week the forecast was different. Then the harvest was projected at 14 million tons at an average yield of 8.7 q / ha. In any case, we leave both of these forecasts. Weather is changeable, and everything may change any second. At least, there is optimism in the speeches of the Head of the Ministry of Agriculture.

“Overall, despite the dry weather conditions, the level of grain crops in the country will be the average annual level. A good harvest is expected in the North-Kazakhstan region and in some areas of Karaganda, Akmola, Kostanai regions”, Mamytbekov said.

Following the meeting, the President gave specific instructions for the timely preparation for the harvest, and rendering necessary assistance to local farmers affected by adverse weather conditions. Now the main center of the drought affected southern areas of Kostanai, Akmola, Karaganda and Aktobe regions.

Grain balance in the country in the forecast variant is reduced; world prices are growing. Kazakhstan will have to follow them. Otherwise, all grains will disappear from the Kazakhstan market, as if by magic.  And the excessive reserves left from last year will not help. Under these conditions, they are not excessive, but very necessary. It will be difficult to millers and bakers to keep the price bar low for bread, especially for those who do not have stocks of cheaper corn from prior periods. Deteriorated forecasts of grain in 2012 do not please grain producers, because now market conditions are such that farmers can make good money, but more about this below.

Kazakhstan

In July grain harvesting campaign started in Kazakhstan. Its coverage for the current period – south and west of Kazakhstan. Here, farmers have started reaping the winter grain.

As of July 19, farmers harvested 246.9 thousand ha of crops, ground 254.5 thousand tons of grain with the yield of 10.3 q / ha (including in the Almaty region – 16.5 q / ha, West-Kazakhstan – 10 q / ha, Zhambyl – 6.8 q / ha, Kyzylorda – 6 q / ha, South-Kazakhstan – 20.6 q / ha).

In all these areas the yield is lower than last year. In general, the yield in 2012 was only 86.5% of the previous year level.

The largest drop in yield is observed in the Kyzylorda region (see table). However, the rate of harvest this year is higher. Because of the threat of further drought farmers have started reaping earlier than last year. Total for Kazakhstan, due to dry weather conditions the gross grain harvest this year is projected at 14 million tons with an average yield of 8.7 q / ha.

Name of the region

Sown area, thousand ha

Harvested area, thousand ha

Harvested as of 13.07

Ground, thousand tons

Yield, q/ha

2011

2012

2011

2012

2011

2012

2011

2012

2011

2012

thousand ha

%

thousand ha

%

Almaty

465,5

467,6

461,7

434,6

50,9

11

54,8

12,6

81,5

90,4

16,0

16,5

Zhambyl

223,7

242,8

216,9

194,2

70

32,3

72,4

37,3

45,7

48,9

6,5

6,8

West-Kazakhstan

394,5

400,7

356,6

397,9

0,0

0,0

50,7

12,7

0,0

50,8

0,0

10,0

Kyzylorda

86,8

84,1

86,8

84,1

6,5

7,5

5,3

6,3

5,7

3,2

8,7

6,0

South-Kazakhstan

212,7

195,9

209,9

188,7

56,0

26,7

63,8

33,8

73,3

61,2

24,6

20,6

Total:

1383,2

1391,1

1331,9

1299,6

183,4

13,8

246,9

19,0

206,2

254,5

11,2

10,3

As of July 12 this year, 5845.9 thousand hectares of crops or 36.5% are in good condition, in satisfactory – 8597.4 thousand hectares, or 53.7%, in a bad – 1502.6 thousand hectares, or 9 4%, and 59.4 thousand hectares, or 0.4%, are to be written off, the press service of the Ministry of Agriculture reported.

Новость на Казах-зерно:In Kazakhstan were summed up the export of cereals and products produced from them in the 2011-12 marketing year. According to the Statistics Agency of Republic of Kazakhstan and JSC “NC” Kazakhstan Temir Zholy” from July 1, 2011 to June 30, 2012, 12.1 million tons of grain were shipped for export based on flour in grain equivalent, which is 2.2 times more than in 2010-2011 MY, including in the form of grain – 8.4 million tons, in the form of flour – 2.6 million tons. Average monthly shipments of grain for export (including flour in grain equivalent) amounted to more than 1 million tons. In the first decade of July this year for export were shipped 157.8 thousand tons of grain and 47.2 thousand tons of flour. The opportunities for export of grain from Kazakhstan in the new year remain high with the new crop of about 14 million tons, and ending stocks at 10 million tons.

Due to the fact that the purchase price in the domestic market for wheat of 3 class in the first half of July has increased significantly, further subsidizing of transport costs for exporting grain is losing its relevance. In this regard, the Ministry of Agriculture will review and discuss the possibility of elimination of export subsidies from August this year.

As of July, 1 this year, the GRC of the Republic store 8.2 million of grain with the load of 58.7%. At GRC of three main grain growing areas is stored 6.75 million tons of grain with the workload of 61% (Akmola – about 47.5%, Kostanai – 70.5%, North-Kazakhstan – 56.1%). We remind, that in Kazakhstan on July 1, carry over grain stocks totaled 9,813,548 tons.

Given that congestion is likely to storage tanks during the harvest in 2012, the Ministry of Agriculture encourages farmers to hold the harvesting campaign in a timely manner, in the optimum agronomical terms.

At present time due to poor equipment of technical facilities, as well as a lack of funds for the purchase of harvesters in the crop sector, small producers are forced to rent harvesting equipment from large companies after completion of harvesting. Due to the fact that the lease of harvesting equipment is made in the late agricultural period, during the autumn rains, in the future for small farms appears a problem with the storage of wet grain.

This problem is particularly relevant in the current year, when GRC are loaded with grain from last year’s harvest. To address this issue the Ministry of Agriculture through its subsidiary “KazAgro” – JSC “KazAgroFinance” offers a new leasing product called “Harvest-2012”, in which provides a number of attractive conditions for farmers.

In the first half of July wheat futures on the stock exchange ETS stubbornly unchanged. The last change was on July, 4. That day wheat contracts ceased growth and played down on the stock exchange ETS. Contracts with the performance in July fell by 30 tenge, with the performance in September – 130 tenge in October – 170 tenge, in November – 200 tenge and in December – 240 tenge per ton of wheat of 3 class.

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

Wheat

July

August

September

October

November

December

3 class

22 000

24 000

23 500

24 000

24 500

25 000

But the change came on July, 16. That day on the stock exchange ETS wheat contracts rose in the two positions and July contracts closed. On July 17, 18 and 19 on the Stock Exchange ETC wheat contracts rose in almost all positions.

As of July, 20 contracts with the execution in August rose by 380 tenge, with the execution in October – 400 tenge, in November – 420 tenge, in December – 420 tenge in January – 560 tenge per ton of wheat of 3 class.

The values of wheat futures on the ETS exchange according to delivery month as of July 20, 2012 (tenge per ton)

Wheat

August

September

October

November

December

январь

3 class

25 450

23 500

25 850

26 450

26 600

27 040

As a result, for the period from July, 4 to 20 nearby wheat contracts for August delivery rose by 15.3% on the Stock Exchange ETS.

In the market of cash sales of grain in Kazakhstan for the period from June, 29 to July, 16, the prices of wheat of 3 class and above continue to grow, and increased in the range of 2700-3400 tenge per ton in the different regions of the country. Wheat of 4 class jumped in price immediately by 2400-2800 tenge per ton. The fall of the tenge against the dollar to 149.95 Tenge / USD only stimulated the growth of domestic prices.

Новость на Казах-зерно:Increase in domestic wheat prices is primarily due to the positive dynamics of the global market in the first half of July. Reduction of forecasts for the world harvests, in particular, in such countries as USA, Russia, Kazakhstan, has led to a record increase in prices.

As previously reported, during the week from July, 6 to 13 in the USA, wheat increased by 5.1% in Chicago and by 5.2% – in Kansas City. In London, futures rose by 4.2%, while in Paris by 3%. Corn grew by 6.8%, and soybeans – by 3.1%. During the period from July, 13 to 20,  wheat futures in the U.S. rose by 11.3% in Chicago and by 10.6% – in Kansas City. In Europe, growth was less significant. In London, the wheat has risen by 4.8%, while in Paris – by 4.9%. Corn in this period increased by 7.5% and soybeans – by 8.6%.

Barley has strengthened its position from the moment of publication of our last survey; sales grew by 1500 tenge per ton.

All varieties of flour rose in all regions of Kazakhstan by approximately 2500 tenge per ton, due to increase in purchase prices for wheat.

Currently, you can buy wheat of 3 class from new harvest in Astana for 28,500 tenge ($190; here and further is applied the exchange rate of National Bank of Kazakhstan on 07/17/2012) per ton. It is 3000 tenge higher than on July, 6. The wheat of 4 class is sold by 26,700 ($178). First-rate flour in the capital of our country costs 40,600 tenge ($270.7) per ton. The increase was by 2500 tenge. Second-rate flour is sold by 38,300 tenge ($255.4) per ton, and flour of extra class – by 42,900 tenge ($286) per ton.

A ton of wheat of 3 class can be purchased for 27,600 tenge ($ 184), wheat with gluten content above 27 percent – for 30,400 tenge per ton ($ 202.7), wheat of 4 class – 24,300 tenge ($162), barley of a 2 class now costs 25,100 tenge ($167.4) per ton in Akmola region. Flour of extra class costs 42,600 tenge ($ 284), first- and second-rate flour is offered at 40,300 tenge ($268.8) and 38,000 tenge per ton ($ 253.4), respectively.

In the North Kazakhstan region wheat of 3 class is sold by 27,000 tenge ($ 180) per ton, wheat with gluten content above 27 percent – by 29,300 tenge ($195.4), wheat of 4 class –  by 23,800 tenge ($158.7). The current price of barley is 24,600 tenge per ton ($164). In the North Kazakhstan the price of flour of extra class is 41,200 tenge per ton ($274.7), first-rate flour costs 38,900 tenge ($259.4) and second-rate flour costs 36,600 tenge per ton ($244).

In Kostanai region the price of wheat of 3 class rose to the level of 27,800 tenge per ton ($ 185.4). Wheat with gluten content above 27 percent is sold by 28,800 tenge ($192). Wheat of 4 class costs 24,500 tenge ($163.4). The price of barley of 2 class is 24,300 tenge ($162) per ton. The market price of flour of all classes also went up: extra class – to 41,200 tenge per ton ($274.7), first-rate – to 38,900 tenge  ($259.4), and second-rate flour – to 36,600 tenge  ($244) per ton.

In Pavlodar region the price of wheat of 3 class is 28,700 tenge per ton, or $ 191. 4 per ton; wheat of 4 class is sold by 26,600 tenge ($177.4). The price of barley is 27,000 tenge ($ 180) per ton. Flour of extra class costs 43,300 tenge ($288.8) per ton, first-rate flour costs 41,000 tenge ($273.4) per ton, second-rate flour costs 38,700 tenge ($ 258) per ton.

In Karaganda region wheat of 3 class costs 29,200 tenge ($194.7) per ton, wheat with gluten content above 27 percent costs 37,100 tenge ($211.4) per ton; wheat of 4 class costs 26,800 tenge ($178.7). The price of barley is 26,200 tenge ($174.7) per ton. In Karaganda, traders sell flour of all rates at the following prices: first-rate – 40,600 tenge ($270.7) per ton, second-rate – 38,300 tenge ($ 255.4) per ton and extra class – 42,900 tenge ($2786) 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 28,900 tenge ($192.7) per ton, barley- 25,300 tenge ($168.7) per ton. In the West region of the country the price of wheat of 3 class fixed at 30,000 tenge ($200) per ton. The cost of first-rate flour in East Kazakhstan is 40,700 tenge ($271.4) per ton, second-rate flour costs 38,400 tenge ($256) per ton, and flour of extra class – 43,000 tenge ($286.8) per ton. In the West Kazakhstan prices for flour are the same.

In Almaty region the price of wheat of 3 class for today is offered by 29,700 tenge ($198) per ton, wheat of 4 class – by 28,700 tenge ($191.3); barley of 2 class is sold by 26,500 tenge ($176.7) per ton. The cost of flour of extra class in this region is 43,600 tenge ($290.8) per ton, first-rate –41,300 tenge ($275.4) per ton, second-rate – 39,000 tenge ($260) per ton.

In Zhambyl region the price of wheat of 3 class for today costs 30,200 tenge ($201.4) per ton, barley of 2 class is sold by 27,100 tenge ($180.7) per ton. The cost of flour of extra class in this region is 43,300 tenge ($288.7) per ton, first-rate –41,000 tenge ($273.4) per ton, second-rate – 38,700 tenge ($258) per ton.

In the South Kazakhstan region wheat of 3 class is offered by 30,000 tenge ($200) per ton, wheat of 4 class – by 27,700 tenge ($184.7), barley – by 25,600 tenge ($170.7) per ton. The cost of flour of extra class in this region is 43,800 tenge ($292) per ton, first-rate – 41,500 tenge ($276.8) per ton, second-rate – 39,200 tenge ($261.4) per ton.

In Aktobe region wheat of 3 class is offered by 30,500 ($203.4). Flour of extra class can be purchased for 44,200 tenge ($294.8) per ton, first-rate – 41,900 tenge ($279.4) per ton, second-rate – 39,600 tenge ($264) per ton.

In Kyzylorda region wheat of 3 class is sold currently at 30,700 tenge ($204.7) per ton. The cost of flour of extra class is 46,000 tenge ($306.8) per ton, first-rate – 43,700 tenge ($291.4) per ton and second-rate – 41,400 tenge ($276) per ton.

In the south capital, Almaty, you can buy wheat of 3 class by 30,600 tenge ($204) per ton. Flour of extra class costs in Almaty 45,300 tenge ($302.1) per ton, first-rate – 43,000 tenge ($286.7), and second-rate – 40,700 tenge ($271.4) per ton.

The dynamics of grain and flour prices on export boundaries of the republic is absolutely different. Wheat of 3 class increased by about $ 9-11 per ton. Wheat and flour also increased significantly due to rise in prices in the domestic market.

According to the agricultural expert, Vladimir Petrichenko, who gave a telephone interview to the IA “Kazak-Zerno”, the prospects of Kazakh grain exports in the new 2012-13 marketing season are not bad. Because of the reduced yield of 80 – 85 million tons in Russia, quite large volumes of Kazakhstanian grain will be transported to the Volga and Urals federal districts. Export demand this year is unlikely to fall, but the ability of Russia to deliver the grain on world markets will be much lower.

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 $214 per ton, with gluten content of 27-30 percent – $226 per ton. Barley costs $188 per ton. Flour of extra class is sold by $285, the cost of first-rate flour is $271 and the second-rate -$257 per ton.

At the elevators of the South Ural railway the current cost of wheat of 3 class is $ 184 a ton, wheat with gluten content above 27 percent – $197. The price of barley there is $158 per ton. Flour of extra class can be bought by $265, first-rate flour is $251 and the second-rate -$237 per ton.

At the station Sary-Agash (Kazakhstan – Uzbekistan, DAP) wheat of 3 class costs $218, wheat with gluten content above 27-30 percent – $241. The price of barley there is $193. Flour of extra class can be bought by $286, first-rate flour is $272 and the second-rate -$258 per ton.

Новость на Казах-зерно:At the station Tobol (DAP) wheat of 3 class costs $206, wheat with gluten content above 27-30 percent – $218. Barley is sold by $163 per ton. Flour of extra class can be bought by $263, first-rate flour is $249 and the second-rate -$235 per ton.

At the station Amuzang (Uzbekistan – Tajikistan, CPT) – the cost of wheat of 3 class is fixed at $265 per ton; wheat with gluten content above 27-30 percent is sold by $278 per ton. Flour of extra class is offered by $324, first-rate flour is $312 and the second-rate – $294 per ton.

The average price of wheat of 3 class at the the station Hajraton (Uzbekistan – Tajikistan, CPT) is $271 per ton; wheat with gluten content above 27-30 percent is sold by $278 per ton. Barley can be bought by $251 per ton. Flour of extra class is offered by $340, first-rate flour is $325 and the second-rate – $305 per ton.

At the station Sarahs wheat of 3 class on the CPT terms is sold by $271 per ton; wheat with gluten content above 27-30 percent is sold by $277, barley – $260. Flour of extra class is sold by $348, first-rate flour is $333 and the second-rate – $312 per ton.

In the port of Aktau on FOB conditions wheat is sold by $243, wheat with gluten content above 27-30 percent is sold by $ 266, barley – $ 238. Flour of extra class is sold by $300, first-rate flour – by $286 and second-rate – by $272 per ton.

Reference: $1 = 149.51 tenge, 1 euro = 183.22 tenge, 1 ruble = 4.68 tenge, 1 som = 3.17 tenge, 1 pound sterling = 234.66 tenge, 1 hryvna = 18.5 tenge.


Alimbek Gabitov

Rate article
Kazakhzerno
Add a comment