International experts predict great harvest. Do farmers feel better?

Новость на Казах-зерно:

Just today, the Minister of Agriculture of Kazakhstan Asylzhan Mamytbekov announced the final figure of the 2012-13 marketing season. According to the head of the agricultural department, Kazakhstan over the past 12 months has shipped 7.1 million tons of grain. This figure will certainly be analyzed, our research department will present it in the next releases. Today, the following can be said: the country did not use a successful price environment of the past MY to the full extent. With a relatively low yield in 2012, but with decent carryover stocks, Kazakhstan reduced the export of grain by 42% compared with 2011-12 MY.

Holding company, on the need for creation of which insisted the head of the state, formally took place. Still, there are some ambiguities in this issue, and there will be a lot of organizational work ahead, but the format of the Holding has already been laid. The structure, designed to be a major player in the domestic and international grain market is beginning to take shape. For example, after much discussion, it was decided that United Grain Holding will be managed by public council of 11 members, 5 of them – representatives of the Farmers Union of Kazakhstan.

Kazakhstan

In the second half of June in the AIC of Kazakhstan, at last, took place the event that was spoken about for several years. On Friday, June 21, was signed a contract governing the creation of the United Grain Holding in Kazakhstan. The agreement was signed between Farmers Union of Kazakhstan and Food Contract Corporation, which is a part of the holding “Kazagro.”

Holding company, on the need for creation of which insisted the head of the state, formally took place. Still, there are some ambiguities in this issue, and there will be a lot of organizational work ahead, but the format of the Holding has already been laid. The structure, designed to be a major player in the domestic and international grain market is beginning to take shape. For example, after much discussion, it was decided that United Grain Holding will be managed by public council of 11 members, 5 of them – representatives of the Farmers Union of Kazakhstan.

From the outset, the initiators of the Holding want to bring in democratic principles into the management structure. According to the Head SFC Auezkhan Darinov, representatives of the Union to participate in the management of grain holding were elected democratically – at regional meetings.

It is assumed that the farmers themselves will be able to take part in pricing. And holding should play in the market in order to cover the administrative costs and to get profit. According to the results of grain sales, profits will be divided among the members-participants of the agreement of the United Grain Holding. Meanwhile we are working on the compilation of this text, which is actively discussed.

“A lot of other problems and issues are raised, and I’m sure even more will come up. The main thing is that the process has started and we, the public, ordinary peasants are taking active part”, said the head of the Union Auezkhan Darinov.

And while holding is being created, the events in the grain market of the country are going on as usual.

Price situation

“In the second half of June the price of wheat, barley and flour in the domestic market of Kazakhstan fell even further under the influence of some internal and external factors.

Wheat of 3 class lost for the entire period from 900 to 1,100 tenge per ton, and barley fell by 800 -1,300 tenge per ton depending on the sales region. Flour of all grades fell within 700-800 tenge per ton.

In the world markets during the same period the price of wheat and corn fell to their lowest level in 2012-13 MY that had an impact on the domestic market of Kazakhstan.

Global consumers are waiting for the new crop with lower prices, delaying purchases at a later date, thereby reducing overall demand. Meanwhile, the new grain in Kazakhstan will not appear soon and hopes for a bountiful harvest are not so rosy, like a month ago.

Forecastsfor 2013 crop

The climate conditions of plant growth in June were less favorable than we would like. A good basis for the crops in the form of high moisture content in the soil before planting nullified too dry June with a minimum level of rainfall. Because of this increased interest rates on yield are not quite justified. In Kazakhstan the rain poured down as if through a sieve into a large cage – somewhere it was, in other places there was no precipitation at all. Again, the long-suffering West suffered the most of all. Moreover, the region suffers from locusts which affected large areas of the Orenburg region of Russia, Bashkiria and north-west of Kazakhstan.

Grain growers in Aktobe region can hardly blunt the attack of pest. Such an invasion of voracious insects farmers see for the first time in 30 years. Particularly were affected crop farms, which are located along the border of the adjacent territory of Orenburg, from which there is mass migration of locusts.

Новость на Казах-зерно:Locusts do not spared Kostanay region too. More than 850 thousand hectares are already cultivated there and more than 70 percent of the pests are destroyed. But the situation is aggravated by the lack of rainfall across the region, as well as the high temperatures that can literally burn the crops and dry land.

So, the first month of summer has not added joy for the peasants. There is no rain, and weather forecasts are not very inspiring. Rosy forecasts of June, including of the USDA experts who predict to Kazakhstan production of cereals at 15 million tons, are melting right in front of your eyes. Local independent experts and practitioners of the grain business taking into account the latest reports of agricultural meteorologists and the current state of the crops barely give 10 million for the 2013 harvest. According to them, the results of the season will vary considerably in different farms.

In a better position will be the ones who managed to sow at an opportune time in May. In these farms plants have time to get stronger with the help of spring moisture and are more ready for the summer hardships related to the lack of rainfall. Those who held late sowing will be in a worse position. Their crops can die, and in the best case – to give poor harvest of grain. But let’s hope for the best and for the fact that precipitation that came to the rescue will fix things.

Results and export forecasts

According to statistical information of CTC, in May Kazakhstan shipped 138.9 thousand tons wheat or rye flour, which corresponds to April volumes of 138.8 thousand tons. It was shipped 264.1 thousand tons of wheat and meslin, totaling 65,483 thousand dollars, which is two million higher than the April figures. For comparison, in April shipments of wheat totaled 236.2 thousand tons.

In the structure of exports Kazakh exporters do not have added much in supplies to the CIS -190.8 thousand tons compared with 165.7 thousand tons in April. The rest of the world imported 73.2 70.4 thousand tons of grain, which almost corresponds to the April marks.

Among the major importers of Kazakh wheat in May in the CIS Uzbekistan again became the leader. Shipments to that country amounted to 71.2 thousand tons, which is almost 20 thousand higher than the supply of April. Azerbaijan in May recorded the need of 54.8 thousand tons, in April – 58 thousand tons, in March – 75.1 thousand tons and in February – 56.6 thousand tons.

Tajikistan imported 53.6 thousand tons in May and in April – 47.8 thousand tons. Delivery to Kyrgyzstan, which bought 16.3 thousand tons in April, rolled back to 11 thousand tons.

Regarding foreign countries, the main importer Iran has reduced imports by four times: 4.5 thousand tons compared with 25.7 thousand tons in April. The leading position of importer in the last month of spring has saved Turkey, which bought 46.5 thousand tons compared with 37.5 thousand tons in April, and 12.7 thousand tons of March. In general, the geography of supplies of Kazakh wheat in April was very varied. About 3 thousand tons were sent to Greece and Lebanon, 1740 tons to China, 2200 – to Poland and 12 thousand tons to Sweden. It is a pity that such a “range” of buyers did not strongly influenced on the volume.

In January was handled 5.4 million tons of barley, which is almost 4,000 fewer than the previous month. More than two-thirds of the weight took Iran – 3.1 thousand, and one thousand tons went to Azerbaijan.

In May were exported more flour, as mentioned above, than in April. The main customers of Kazakh flour remain the CIS countries. They received about 80% of the total volume, or 113,716 tons.

In the import structure again stands out Uzbekistan, which had brought from Kazakhstan in the period 77,182 tons, which is 2 thousand tons more than in April. In Tajikistan was delivered 14,339 tons, Kyrgyzstan – 18,132 tons with a plus of 7 thousand tons. The main and sole importer of Kazakh flour in foreign countries was of Afghanistan. Here in May was delivered 25,169 tons, which is 3 thousand tons less than April’s exports (28,645 tons), but still 20 thousand tons more than in March.

At present, the export potential of Kazakhstan is estimated at 7-7.5 million tons by the Ministry of Agriculture of Kazakhstan. FAS USDA experts are predicting Kazakhstan 6.5 million tons of export shipments. But forecasts are subject to change in the early months of the season, when the situation will be clear with the volume and quality of the new crop, as well as the volumes of grain balance sheets for countries competitors in export.

We recall, the latest export projections for wheat were reduced by 1.5 million tons and 1 million tons for Russia and Ukraine, respectively. Russia will deliver abroad some 17 million tons, Kazakhstan – 7.5 million tons, and Ukraine – 8 million tons of wheat. Meanwhile, imports of wheat in those three countries could reach 0.5 million tons, 0.01 million tons and 0.1 million tons respectively.

In any case, even if the grain harvest in Kazakhstan will be below the expected level, the country can count on sufficient carryover stocks of grain from last season. As it was previously reported, according to the Statistics Agency of Kazakhstan, as of May 1, grain stocks in Kazakhstan amounted to 9,255,850 tons. On June 1, there was 6,893,321 tons of grain in Kazakhstan. Data on stocks of grain, on July 1, will appear soon and will give a clearer picture of the grain balance in the country.

Новость на Казах-зерно:Grain trade and prices

At the ETS Exchange from June 14 to June 28 were made 84 deals for wheat of 3 class. From June 17 to June 21 at the ETS 44 transactions took place for wheat of 3 class. It was sold 422,692 tons of wheat in the amount of 17,394,130,550 tenge, or $114,616,014.14. The average transaction price last week was $41,150.8 tenge per ton of wheat. Compared with the previous week the average price increased by 5,652.3 tenge per ton.

At the last week from June 21 to June 28 at the ETS Exchange took place 40 deals for wheat of 3 class. It was sold 282,324 tons of wheat in the amount of 10,840,222,734 tenge, or $71,430,021.7. The average transaction price last week was $38,396.3 tenge per ton of wheat. Compared with the previous week the average price decreased by 2,754.4 tenge per ton.

As a result, during the first half of June in the sector of agricultural products at the ETS Exchange passed 84 deals for wheat of 3 class, as a result of which it was sold 705,016 tons of wheat in the amount of 28,234,353,284 tenge, or $186,046,035.84.

We recall, for the first half of June at the ETS Exchange passed 59 deals for wheat class 3, which resulted in distributed 675,168 tons of wheat in the amount of 24,836,081,737 tenge, or $164,046,705.6 dollars.

For more information on the ETS trading sessions, see the analytical application “The dynamics of sales and prices at the ETS of wheat of 3 class”.

***

Currently, you can buy wheat of 3 class from new harvest in Astana for 33,600 tenge ($221.07; here and further is applied the exchange rate of National Bank of Kazakhstan on 07/05/2013) per ton. First-rate flour in the capital of our country costs 52,900 tenge ($348.05) per ton. Second-rate flour is sold by 49,300 tenge ($324.36) per ton. Flour of extra-class costs 55,300 tenge ($363.84) per ton.

A ton of wheat of 3 class can be purchased for 32,500 tenge ($213.83), wheat with gluten content above 27 percent – for 34,900 tenge per ton ($229.62), barley of a 2 class now costs 32,200 tenge ($211.86) per ton in Akmola region. Flour of extra class costs 53,000 tenge ($348.71), first- and second-rate flour is offered at 50,600 tenge ($332.92) and 46,500 tenge per ton ($305.94), respectively.

In the North Kazakhstan region wheat of 3 class is sold by 31,000 tenge ($203.96) per ton, wheat with gluten content above 27 percent – by 32,700 tenge ($215.15). The current price of barley is 29,200 tenge per ton ($192.12). In the North Kazakhstan the price of flour of extra class is 51,300 tenge per ton ($337.52), first-rate flour costs 48,600 tenge ($319.76) and second-rate flour costs 46,400 tenge per ton ($305.28).

In Kostanay region the price of wheat of 3 class rose to the level of 31,500 tenge per ton ($207.25). Wheat with gluten content above 27 percent is sold by 34,100 tenge ($224.36). The price of barley of 2 class is 28,100 tenge ($184.88) per ton. The market price of flour of all classes went down: extra class – to 50,800 tenge per ton ($334.23), first-rate – to 47,700 tenge ($313.84) and second-rate flour to 45,400 tenge ($289.7) per ton.

In Pavlodar region the price of wheat of 3 class is 34,500 tenge per ton, or $ 226.99 per ton. The price of barley is 31,100 tenge ($204.62) per ton. Flour of extra class costs 54,300 tenge ($357.26) per ton, first-rate flour costs 52,800 tenge ($347.39) per ton, second-rate flour costs 48,400 tenge ($318.44) per ton.

In Karaganda region wheat of 3 class costs 34,900 tenge ($229.62) per ton, wheat with gluten content above 27 percent costs 36,000 tenge ($236.86) per ton. The price of barley is 31,900 tenge ($209.88) per ton. In Karaganda, traders sell flour of all rates at the following prices: first-rate – 53,300 tenge ($350.68) per ton, second-rate –50,300 tenge ($330.94) per ton and extra class –55,800 tenge ($367.13) per ton.

Over the past period, the cost of wheat has risen in the East and West Kazakhstan. In the East Kazakhstan region of the country the price of wheat of 3 class fixed at 37,700 tenge ($248.04) per ton, barley – 32,800 tenge per ton ($215.8). In the West of the country wheat of 3 class costs 35,700 tenge ($234.88). The cost of first-rate flour in East Kazakhstan is 53,100 tenge ($349.37) per ton, second-rate flour costs 48,500 tenge ($319.1), per ton, and flour of extra class – 55,800 tenge ($367.13) per ton. In the West Kazakhstan prices for flour are as follows: extra class costs 56,300 tenge ($370.42), first-rate – 52,900 tenge ($348.05), second- rate -50,000 tenge ($348.05) respectively.

In Almaty region the price of wheat of 3 class for today is offered by 35,800 tenge ($235.54) per ton. Barley of 2 class is sold by 31,700 tenge ($208.57) per ton. The cost of flour of extra class in this region is 56,900 tenge ($374.37) per ton, first-rate –54,400 tenge ($357.92) per ton, second-rate – 51,500 tenge ($338.84) per ton.

In Zhambyl region the price of wheat of 3 class for today costs 36,800 tenge ($242.12) per ton, barley of 2 class is sold by 35,500 tenge ($233.57) per ton. The cost of flour of extra class in this region is 57,200 tenge ($376.34) per ton, first-rate –54,600 tenge ($359.23) per ton, second-rate – 52,500 tenge ($345.42) per ton.

In the South Kazakhstan region wheat of 3 class is offered by 35,800 tenge ($235.54) per ton, barley – by 32,800 tenge ($215.8) per ton. The cost of flour of extra class in this region is 57,300 tenge ($377) per ton, first-rate – 54,100 tenge ($355.95) per ton, second-rate –49,900 tenge ($328.31) per ton.

In Aktobe region wheat of 3 class is offered by 34,000 ($223.7). Flour of extra class can be purchased for 58,700 tenge ($386.21) per ton, first-rate – 54,100 tenge ($355.95) per ton, second-rate – 51,800 tenge ($340.81) per ton.

In Kyzylorda region wheat of 3 class is sold currently at 34,800 tenge ($228.96) per ton. The cost of flour of extra class is 58,200 tenge ($382.92) per ton, first-rate – 55,400 tenge ($364.5) per ton and second-rate – 52,100 tenge ($342.79) per ton.

In the south capital, Almaty, you can buy wheat of 3 class by 35,500 ($233.57) per ton. Flour of extra class costs in Almaty 57,900 tenge ($380.95) per ton, first-rate – 54,900 ($361.21), and second-rate – 51,700 tenge ($340.15) per ton, respectively.

As you can see, the table of prices for Kazakhstanian wheat, barley and flour on export borders of the Republic is provided with a running start at 7-10 dollars. It is advised to add so much to the real price of exporters, taking into account new tariffs of Kaztemirtrans.

The cost of wheat of 3 class with gluten content of 23 percent on DAP terms at the station Lugovaya (Kazakhstan – Kyrgyzstan) is $262-271 per ton, with gluten content of 27-30 percent – $277-287 per ton. Barley costs $229-239 per ton. Flour of extra class is sold by $426-436; the cost of first-rate flour is $407-417 and the second-rate -$ 385-395 per ton.

At the elevators of the South Ural railway the current cost of wheat of 3 class is $225-235 per ton, wheat with gluten content above 27 percent – $242-252. The price of barley there is $197-202 per ton. Flour of extra class can be bought by $405-415; first-rate flour is $389-399 and the second-rate – $362-372 per ton.

Новость на Казах-зерно:At the station Sary-Agash (Kazakhstan – Uzbekistan, DAP) wheat of 3 class costs $266-276, wheat with gluten content above 27-30 percent – $285-295. The price of barley there is $235-245. Flour of extra class can be bought by $434-444, first-rate flour is $419-429 and the second-rate -$392-402 per ton.

At the station Tobol (DAP) wheat of 3 class costs $244-254, wheat with gluten content above 27-30 percent – $261-271. Barley is sold by $209-219 per ton. Flour of extra class can be bought by $413-423, first-rate flour is $397-405 and the second-rate -$378-388 per ton.

The average price of wheat of 3 class at the station Hajraton (Uzbekistan – Tajikistan, CPT) is $341-351 per ton; wheat with gluten content above 27-30 percent is sold by $342-351 per ton. Barley can be bought by $290-300 per ton. Flour of extra class is offered by $503-513, first-rate flour is $483-493 and the second-rate – $463-479 per ton.

In the port of Aktau on FOB conditions wheat is sold by $272-282, wheat with gluten content above 27-30 percent is sold at $291-301, barley – $247-257. Flour of extra class is sold by $452-462, first-rate flour – by $446-456 and second-rate – by $419-429 per ton.

Reference: 1 dollar = 152.01 tenge, 1 euro = 197.55 tenge, 1 ruble = 4.58 tenge, 1 som = 3.12 tenge, 1 pound sterling = 231.77 tenge, 1 hryvna = 18.54 tenge.


Alimbek Gabitov

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