In Astana, on March, 16 was opened V Kazakhstanian Grain Forum «Kazgrain-2012″. According to the level of experts, the major market participants, leaders of grain associations and senior government officials provided in the forum experts, the forum can be safely attributed to the significant events in the regional market.
The level of the event influences on the level of announces of state officials at the event. In no way less in value than the forum itself. The most notorious of them on the allocation of an additional 15 billion tenge to subsidize the export of grain was made by the Minister of Agriculture Asylzhan Mamytbekov.
“The Ministry of Agriculture has proposed to the Government allocation of additional funds to subsidize transportation costs, as now, the program continues in the direction of the Black Sea and Baltic Sea, as well as in China and through the territory of China. The government supported this idea and in the near future this issue will be reviewed on the State Commission. We believe that the issue of an additional allocation of 15 billion tenge (about $ 100 million) will be approved, “- Mamytbekov said.
He explained that the subsidy will amount to nearly four thousand tenge per ton of grain. “That’s enough to subsidize additional 3.5 million tons in these areas, which will increase the export of Kazakhstanian grain,” – said the Minister of Agriculture.
“Taking into account the excess balance of Kazakhstanian grain, we can talk about our interest in expanding and increasing the volume of export of our grain,” – added the Minister.
We will return to this theme below, but there is need just to see with half an eye. Leaving the same amount of subsidies in the offer, the Ministry of Agriculture now divides it into a larger amount of grain, which ultimately reduces the level of subsidy for transportation per ton more than for a quarter – about $27. It is clear, of course, they want to export more grain and to save money too.
The forum discussed the prospects of further development of the grain industry and the promotion of export of Kazakhstanian grain. Also was stressed the necessity to develop the infrastructure of storage and transportation of grain, including construction of new and reconstruction of the old granaries, the construction of port terminals and the acquisition of bulk carriers and grain cars.
The state of the grain balance in Kazakhstan is very tense. As of March,1 the cereals stocks in the Republic are bigger by more than 9.8 million tons than last year. We remind, on March, 1, 2011 Kazakhstan had 8,003,376 tons of grain and grain legumes crops. According to the Statistics Agency of Kazakhstan, as of March 1, 2012 stocks of grain legumes in the country amounted to 17,829,963 tons, and decreased compared to February, 2012 to 1,154,191 ton, or by 6.1%.
At the same time at the end of the last marketing year (July 1, 2011) in Kazakhstan remained 3,462,851 tons, i.e. for 4 months 4,540,524 tons went last year for export and domestic consumption. This year, we need to distribute the grain, mainly wheat, for the same period more than three times as much.
As of March, 1 grain stocks, to a greater extent, as in previous periods, are represented by food grain – 14,882,287 tons, or 83.5% of total reserves, of which 14,411,967 tons – food wheat (80.8%). The whole amount of wheat in grain balance-sheet as of March, 1 is 16,543,877 tons, or 92.8% of the total grain legumes.
Elevators are still full as a state school. The amount of grain in them has almost not reduced. When there appears a free place, new batches of grain are immediately put there.
What to do with such amount of grain and how to take it out in such a short time? The Ministry of Agriculture has no clear plans to address this issue. Even last year the agricultural department staged plans to bring the grain exports up to 1.5 million tons per month, but for four months, since October 2011 to January 2012 for exports were sent only about 4.8 million tons of grain (including flour in grain equivalent). New data for mid-March were announced by executive secretary of the Ministry of Agriculture of Kazakhstan Yevgeniy Aman. About 7.5 million tons of Kazakhstanian grains were shipped for exports in the new marketing year. 34% of this amount is flour, he said.
Earlier, President of Grain Union of Kazakhstan Nurlan Tleubayev suggested that without additional government subsidies for the transportation of wheat from Kazakhstan the major grain growing regions of the country will not have time to release the elevators until the autumn to accept the new crop. President of the Union urges the Government to allocate additional funds to subsidize the transportation of Kazakhstanian grain.
“Only transportation through the ports of the Black and Baltic seas will ease the situation. Only they will be able to “swallow” such amount of grain in a short period of time before the new harvest. We need to increase the loading of grain in this area, as well as in the direction of China. But without export subsidies traders cannot provide transportation”, Nurlan Tleubayev said.
But will Kazakhstan be able to take out at least the same amount even with export subsidies for the remaining four months is the big question. In the spring and summer period importers traditionally reduce their activity by making the necessary supplies before the period of their own crops in order to better clarify its cereal balance sheets.
Of course, traders are interested in export subsidies for an additional amount of grain. We remind that in this season 15 billion tenge were also allocated from the national budget to subsidize grain supply of 2011-2012 harvest to foreign markets. The allocated amount of support in the amount of 15 billion tenge (101.337657 million dollars) is calculated only for just over about 2.5 million tons of grain. This is not comparable with the volume that is necessary to export until the beginning of the new marketing season.
As it was mentioned above, this issue will be considered in the near future on the state commission, and may be it will be approved.
But physically it is almost impossible to export such amount of grain. After all, in order to ship 1 million tons of grain all at once, you need more than 14,000 modern hoppers. And they run to the Black Sea and back not during one week, two or three weeks.You can once again hope for Russia and for its transport assistance. But despite the decline in exports, Russia has not so much extra cars.
And in Kazakhstan, people finally realized that if you’re drowning, you’re on your own. In this case, drowning in grain, and God helps those who does not forget to take care of itself.
According to the press-service of JSC “National Innovation Fund,” under the terms of the signed contract, in 2012 will be produced and supplied for the needs of JSC “NC “Kazakstan Temir Joly ” 200 hopper cars of domestic manufacture. The contract is worth over 2.7 billion tenge, which is now the largest volume of products developed and delivered through technology agreements.
Is it enlightenment? Amazing. Indeed, it is the place to recall the proverb: “One does believe in wonder when hears a sound of thunder.”
Will these 200 cars be able to save a “father of democracy”, but for one and all the export business is still unknown. Maybe if you connect to them jet engines to run faster. Where is this modesty from? May be our leaders would be the same in their personal consumption.
But for now let’s leave these issue and aslo full barns. The Ministry of Agriculture has already mentally planning the future of a new crop. The area sown this year will remain at the same level as last year, said the Minister of Agriculture Asylzhan Mamytbekov on the selector government meeting.
“According to preliminary data of regional departments of agriculture, it is planned to sow the area of 21.2 million hectares in 2012, which is equal to the level of 2011 marketing year. The area of spring sowing will be 18.5 million hectares, grain crops will be sown on 16.3 million hectares. At the expense of wheat acreage decrease to 13.5 million hectares, i.e. for 300 hectares, the increase in acreage of feed grains is expected” – A. Mamytbekov informed.
According to him, the increase in planting feed crops in connected primarily to the implementation program for the development of livestock sector, as well as increased demand for fodder crops.
According to the Head of the Ministry of Agriculture, there is no shortage of seeds for the current spring sowing campaign in the country. “
Privileged amounts of for the spring field works began to arrive to farmers, the Minister said.
He added that “akimats of the regions should take all measures to ensure the timely monthly payment by operators of the regions to the owners of resources for allocated amount of fuel.”
“Regarding the availability of farm machinery: today it is at the level of last year; this year approximately 2700 units of high-producing machinery will take part in sowing campaign. It will allow to plant half of the sown area of grain crops in optimal agronomical terms,” – said the Minister of Agriculture. This year will be saved the mechanism of subsidization and the purchase of fertilizers and herbicides by agricultural producers.
According to Mamytbekov, now banks are active. Along with them the holding “KazAgro” continues realization of spring field works lending due to budget loan of 80 billion tenge.
“In addition, the program of microfinance will be implemented, as well as funding through village credit associations, the rural consumer cooperatives. Total for all programs is planned to finance the 95.8 billion tenge, “- informed the Minister.
Now compare these figures, which will be given to farmers for the growth, with the figure, which is allocated for the purchase of grain cars. Handing out slice paper in debt at interest, is much more profitable than building infrastructure for development of the industry.
In the market of cash sales of grain and flour for the period from 23 February to 15 March prices of wheat in Kazakhstan increased for about 1,000 – 1,100 tenge per ton in the different regions of the country.
Currently, you can buy wheat of 3 class from new harvest in Astana for 25,000 tenge ($169) per ton. It is 1100 tenge higher than in the end of January. First-rate flour in the capital of our country costs 41,000 tenge per ton – the increase was for 500 tenge ($276.8). Second-rate flour is sold by 37,600 tenge ($255.6) per ton, and flour of extra class – by 44,600 tenge ($301.1) per ton.
In Akmola region at the end of January a ton of wheat of 3 class can be purchased for 24,000 tenge ($ 163.5), wheat with gluten content above 27 percent – for 27,100 tenge per ton ($ 183.2), barley of a 2 class now costs 23,100 tenge per ton ($ 156.2). Flour of extra class costs 44,000 tenge ($ 297.1), First- and second-rate flour are offered at 40,500 tenge ($273.4) and 37,300 tenge per ton ($ 251.8), respectively.
In the North Kazakhstan region wheat of 3 class is sold by 23,600 tenge per ton, – growth for 1000 tenge ($ 159.5), wheat with gluten content above 27 percent – by 25,900 tenge ($175). The current price of barley is 22,800 tenge per ton ($154.1). The prices on the flour market went up too. In the North Kazakhstan the price of flour of extra class is 42,800 tenge ($289) a ton, first-rate flour costs 39,500 tenge ($266,7) and second-rate flour costs 36,000 tenge per ton ($243,1).
In Kostanai region the price of wheat of 3 class over the past 3 weeks has risen to the level of 23,800 tenge per ton ($ 160,9). Wheat with gluten content above 27 percent is sold by 26,600 tenge ($179,8). The price of barley of 2 class is 22,500 tenge ($152) per ton. The market price of flour of all classes also went up. The average price of flour of extra class is 43,000 tenge ($290,5) a ton, first-rate flour costs 40,200 tenge ($ 271,6) a ton, second-rate flour costs 36,600 tenge ($247,2) a ton.
In Pavlodar region the price of wheat of 3 class is 24,800 tenge per ton, or $ 167,6 per ton. The price of barley is 24,600 tenge ($ 166,3) per ton. Flour of extra class costs 44,900 tenge ($303,4) per ton, first-rate flour costs 41,100 tenge ($277,7) per ton, second-rate flour costs 38,500 tenge ($ 260,1) per ton.
In Karaganda region wheat of 3 class costs 26,400 tenge ($178.5) per ton, wheat with gluten content above 27 percent costs 27,700 tenge ($187.2) per ton. The price of barley is 24,400 tenge ($164.9) per ton. In Karaganda, traders sell flour of all rates at the following prices: first-rate – 41,700 tenge ($281.7) per ton, second-rate – 38,500 tenge ($ 260.1) per ton and extra class – 44,700 tenge ($302) 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 24,800 tenge ($167.6) per ton, barley- 23,300 tenge ($157.5) per ton. In the West region of the country the price of wheat of 3 class fixed at 26,000 tenge ($175.7) per ton. The cost of first-rate flour in East Kazakhstan is 41,000 tenge ($277) per ton, second-rate flour costs 38,100 tenge ($257.4) per ton, and flour of extra class – 44,700 tenge ($302) per ton. In the West Kazakhstan prices for flour are the following: first-rate – 41,800 tenge ($282.4) per ton, second-rate – 38,900 tenge ($262,8) and extra class – 44,400 tenge ($300) per ton.
In Zhambyl region the price of wheat of 3 class for today is 26,100 tenge ($176.4) per ton, barley of 2 class is sold by 24,600 tenge ($166,2) per ton. The cost of flour of extra class in this region is 45,400 tenge ($306,7) per ton, first-rate – 41,200 tenge ($278.4) per ton, second-rate – 39,300 tenge ($265,5) per ton.
In the South Kazakhstan region wheat of 3 class is offered by 26,600 tenge ($179.8) per ton, barley – by 23,100 tenge ($156,2) per ton. The cost of flour of extra class in this region is 45,500 tenge ($307.4) per ton, first-rate – 43,000 tenge ($290,5) per ton, second-rate – 39,500 tenge ($266,9) per ton.
In Aktobe region the price of wheat of 3 class is sold currently at 26,600 tenge ($179.8) per ton. The cost of flour of extra class is 46,000 tenge ($310.8) per ton, first-rate – 42,800 tenge ($289.2) per ton, second-rate – 39,800 tenge ($268.9) per ton.
In Kyzylorda region wheat of 3 class is sold currently at 26,100 tenge ($176.4) per ton. The cost of flour of extra class is 47,600 tenge ($321.6) per ton, first-rate – 44,200 tenge ($298.6) per ton and second-rate – 41,500 tenge ($280.4) per ton.
In the south capital, Almaty, you can buy wheat of 3 class by 26,600 tenge ($179.8) per ton. Flour of extra class costs in Almaty 46,700 tenge ($315.5) per ton, first-rate – 44,000 tenge ($301.3), and second-rate – 41,000 tenge ($277) per ton.
The dynamics of grain and flour prices on export boundaries of the republic is a little bit different from the dynamics of local prices. Wheat went up in the export boundaries to a much bigger extent – in the region for $ 10-12 per ton, and barley hasn’t changed. Flour rose for about $4-6 because of the high demand. Barley became more expensive for $5.
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 $200 per ton, with gluten content of 27-30 percent – $215 per ton. Barley costs $174 per ton. Flour of extra class is sold by $358, the cost of first-rate flour is $328 and the second-rate -$304 per ton.
At the elevators of the South Ural railway the current cost of wheat of 3 class is $ 175 a ton, wheat with gluten content above 27 percent – $194. The price of barley there is $149 per ton. Flour of extra class can be bought by $341, first-rate flour is $315 and the second-rate -$268 per ton. This is about $20 above the prices at the end of January.
At the station Sary-Agash (Kazakhstan – Uzbekistan) wheat of 3 class costs $201, wheat with gluten content above 27-30 percent – $228. The price of barley there is $179. Flour of extra class can be bought by $367, first-rate flour is $335 and the second-rate -$314 per ton.
At the station Tobol (DAP) wheat of 3 class costs $190, wheat with gluten content above 27-30 percent – $205. Barley is sold by $149 per ton. Flour of extra class can be bought by $344, first-rate flour is $323 and the second-rate -$292 per ton.
At the station Amuzang (Uzbekistan – Tajikistan, CPT) – the cost of wheat of 3 class is fixed at $251 per ton; wheat with gluten content above 27-30 percent is sold by $266 per ton. Flour of extra class is offered by $405, first-rate flour is $386 and the second-rate -$346 per ton.
The average price of wheat of 3 class at the the station Hajraton (Uzbekistan – Tajikistan, CPT) is $258 per ton; wheat with gluten content above 27-30 percent is sold by $260 per ton. Barley can be bought by $239 per ton. Flour of extra class is offered by $413, first-rate flour is $383 and the second-rate – $361 per ton.
At the station Sarahs wheat of 3 class on the CPT terms is sold by $263 per ton; wheat with gluten content above 27-30 percent is sold by $271, barley – $254. Flour of extra class is sold by $420, first-rate flour is $393 and the second-rate – $365 per ton.
In the port of Aktau wheat of 3 class (FOB) costs $229 per ton, wheat with gluten content above 27-30 percent is sold by $255; barley – $224. Flour of extra class can be bought by $371, first-rate flour is $339 and the second-rate – $219 per ton.
Reference: $1 = 147.51 tenge, 1 euro = 192,49 tenge, 1 ruble = 5,00 tenge, 1 som = 3.17 tenge, 1 pound sterling = 231.06 tenge.