Rains in late June – early July adjusted forecasts of Kazakhstan’s harvest upwards. Not everywhere they were abundant and sufficient, but, nevertheless, it has allowed experts to improve the crop forecast to 18.1 million tons. Harvest is not record, but given the high carry-over stocks, Kazakhstan can maintain and even increase its export potential.
Drought in Russia and the United States has driven wheat prices to 300-dollar levels. The market favors the Kazakhstanian wheat, which has become very competitive in the Black Sea market. You cannot build your prosperity on someone else’s grief, but the tragedy in the Kuban, where hundreds of acres are flooded, have made receiving of high yield in Russia even more problematic.
In June increased exports of Kazakhstanian grain through Novorossiysk. Over 13% of the June volume accounts for Kazakhstanian grain. According to the company TransAgent, during June 2012 through the port of Novorossiysk were exported 648.793 thousand tons of grains and oilseeds. This is almost 11.4% more than in May 2012.
Total in June 2012 was shipped for export of 427.744 thousand tons of wheat, which is 3% less than in May. If we exclude the handling of Kazakhstanian wheat (85.582 thousand tons), then Russian wheat exports in June will be 22.4% less than May. But more about that will be mentioned below.
Kazakhstan
The second half of June made Kazakhstanian farmers nervous. Searing heat in some areas gave occasion to think of the most adverse projections of harvest 2012. In particular, the farmers in west Kazakhstan lost winter crops. About this they told this to the correspondent of IA “Kazakh-Grain.” An unfortunate fact, but the basic bread, we still expect our grain growing regions, where in some places the air temperature reached 40 degrees Celsius. The peasants were staring intently into the sky that sends only intolerable doses of ultraviolet to the fields.
Our permanent consultant-agronomist with over 30 years experience, Ivan Rybas draws parallels between the expected harvest and the campaign of 2009:
– The situation is very similar. We got the same moisture supply last spring, the same pattern of rainfall during the first summer month. We can say only one thing – harvesting under these conditions is expected to be hard. The rains were good, but they were late for a month. And therefore, the harvest is shifted to a later date. The main stem has entered a booting stage, but the rain again provoked tillering. This will result in uneven ripening of sprouts. This will not affect the total amount, the yield in such a scenario is encouraging, but there is need to take care of the quality right now. After all, if we have to harvest in September, which can rarely boast with dry weather, the grain will again be wet. Farmers need to prepare dryers now. Also, it is possible that the problems with grain receiving points will appear with new force. Many will be eager to preserve wetted grain.
A similar picture is in Kostanai. Recently, akim of the region made a revision of fields in several areas, and noted the good condition of wheat seedlings after a recent rainfall, but expressed concern about the negative impact of adverse weather conditions this dry summer on the course of vegetation development of the crops in many areas of the region.
The third-grind area of Kazakhstan – Akmola region – also held the second half of June on “the wet spot.” As a result of meteorologists’ route survey, on winter wheat crops in the Akmola region marked the following phase: the emergence of 3 leaf – stem elongation. The general condition of crops in different areas is good and normal.
Inventories of available moisture in the soil during the second decade of June in the west regions of the country were mainly insufficient. In North Kazakhstan and Kostanai regions the soil moisture conditions were estimated from poor to optimum. In Pavlodar and Akmola regions, in the east and center of the country reserves of productive moisture were largely deficient. Terms of soil moisture in the south, south-east are estimated from inadequate to optimum.
These and other facts allow us to evaluate the forecast for Kazakhstan’s grain this fall upward. We remind, according to experts of the Ministry of Agriculture, growers of the country this fall should give up to 15 million tons. Forecast of our experts – 18.1 million tons. At the same time in early May experts of IA “Kazakh Grain,” called the other number – 16 million tons. Moreover, our analysts brought assessment in the context of the harvest areas. Taking into account that half a loaf in the republic is collected in three areas, we can make the picture all over Kazakhstan. In order to save paper space, we present data only for Akmola, Kostanai and North Kazakhstan regions.
Of the 29.4 million tons of last year’s bread North Kazakhstan region ground 8 711.7 thousand tons. In 2010, this result was less than half – 4100.2. Forecast for this year is 5.1 million tons.
Grain harvest in Kostanai region amounted to 8 681.3 thousand tons in 2011, in 2010 – 3 471.1 thousand tons; this year it is projected at 5.4 million tons.
Akmola region milled 7 207.6 thousand tons last fall, in 2010 with a poor yield – 2 722.7 thousand tons, in the current difficult conditions our experts believe, will achieve 4.2 million tons.
That is, only three these areas will add into the treasury of our grain reserves 14.6 million tons. We remind, that the overall capacity of the country’s 221 BRP is 13.9 million tons. There is a mysterious figure of 8.9 million tons – capacity of producers themselves.
According to managing director – member of the board of the holding “KazAgro” Bakyt Kudasbaeva, seven million tons is stored in grain elevators of three northern regions; the loading level is 64 percent.
We have repeatedly raised issue of overcrowding in the country’s granaries. Now we can rely on new data. Even by the cautious forecast of the Ministry of Agriculture of 15 million tons, the situation of overloading of Kazakhstanian storages with grain could not stand criticism.
Yes, the leadership of agricultural departments makes attempts to release elevators, but there is such feeling that they are absolutely ineffective.
Exports of grain also grow. Management of the Ministry of Agriculture does not get tired to report that transshipment of Kazakhstanian grain overseas for the first time reached one million tons per month, and these amounts will be retained until the end of the year. “Prior to October, 1 will be exported 3.8 million tons more”, said B. Kudasbaeva. Thus, the total volume of exports will be about 15 million tons. But by October 1, we obtain a new 18.1 million tons of wet grain which will need to be worked with.
Meanwhile, the harvest of 30 million tons in Kazakhstan is not uncommon. Old-timers surely remember 1972, 1979 and 1990 years with heavy rains and warm sunshine when the grain in the fields grows as yeast-leavened. Yes, and then were distortions, and then appeared the facts when bread was stalled in the pits, but for that people get real prison terms. In most cases elevators, lacking self-serving purposes, managed to cope with record volumes. This is because a very powerful transport network has worked for the industry, which, by the way, ever since has not been updated. Yes, and elevators handed out for nothing in due time, eventually ended up in the hands of the oligarchs-privatizers. The latter, in turn, quickly dividing spheres of influence, have closed a conveyor belt of Kazakhstanian grain on themselves.
There would be a blessing in disguise – this saying many times been deployed in difficult times. Recently the bell came from Russia, leading to different thoughts. The main breadbasket of our nearest neighbors and competitors now failed. From where growing grain market will reimburse the missing volumes is clear even now. Traders do not have to wait until the new crop will go in the storages and instantly react to a poor harvest in southern Russia by buying all the grain in elevators bordering with grain growing regions of Kazakhstan. As a result, we are watching an increase in wheat prices.
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In the second half of June, nearby wheat futures with the performance in July and August on the ETS Exchange in Almaty has not changed. For other positions wheat decreased. During the period from June,4 to June,19 wheat contracts with performance in September fell by 1,000 tenge per ton, with the performance in October – by 1,000 tenge, in November – by 880 tenge per ton for wheat of 3 class.
In the market of cash sales of grain in Kazakhstan for the period from mid-June to June, 29, the prices of wheat of 3 class and above continue to grow, and increased in the range of 400-700 tenge per ton in the different regions of the country. Wheat of 4 class jumped in price immediately on 1000 tenge.
This was facilitated by all the reasons mentioned above.
Barley continues to strengthen its positions. The prices grew by 500 tenge since our last publication.
If demand for this grain stays at the same level, it will remain a relatively small amount of it in the country. Hence, the increase in the price.
All varieties of flour increased in the range of 400-500 tenge per ton. We remind that in late May, the price of flour of extra class decreased, and flour of first- and second-rate during this period on the contrary rose. First-rate flour rose in price with a large range of growth in different regions of Kazakhstan – from 600 to 1,700 tenge per ton. Second-rate flour also increased from 1600 to 2500 tenge per ton in the different regions.
As it was previously reported, the increase in flour prices has a seasonal character. The situation will change very soon when the Central Asian markets will receive the grain from new harvest.
Currently, you can buy wheat of 3 class from new harvest in Astana for 25,500 tenge ($170.87; here and further is applied the exchange rate of National Bank of Kazakhstan on 06/29/2012) per ton. It is 700 tenge lower than on June,14. The wheat of 4 class is sold by 23,700 ($158.81). First-rate flour in the capital of our country costs 38,100 tenge ($255.3) per ton. Second-rate flour is sold by 35,800 tenge ($239.89) per ton, and flour of extra class – by 40,400 tenge ($270.71) per ton.
A ton of wheat of 3 class can be purchased for 24,800 tenge ($ 166.18), wheat with gluten content above 27 percent – for 27,600 tenge per ton ($ 184.94), wheat of 4 class – 21,500 tenge ($144.07), barley of a 2 class now costs 23,600 tenge ($158.14) per ton in Akmola region. Flour of extra class costs 40,100 tenge ($ 268.7), first- and second-rate flour is offered at 37,800 tenge ($253.29) and 35,500 tenge per ton ($ 237.88), respectively.
In the North Kazakhstan region wheat of 3 class is sold by 24,300 tenge ($ 162.83) per ton, wheat with gluten content above 27 percent – by 26,600 tenge ($178.24), wheat of 4 class – by 21,100 tenge ($141.39). The current price of barley is 23,100 tenge per ton ($154.79). In the North Kazakhstan the price of flour of extra class is 38,700 tenge per ton ($259.32), first-rate flour costs 36,400 tenge ($243.91) and second-rate flour costs 34,100 tenge per ton ($228.5).
In Kostanai region the price of wheat of 3 class rose to the level of 24,900 tenge per ton ($ 166.85). Wheat with gluten content above 27 percent is sold by 25,900 tenge ($173.55). Wheat of 4 class costs 22,100 tenge ($148.09). The price of barley of 2 class is 22,800 tenge ($152.78) per ton. The market price of flour of all classes also went up: extra class – to 38,700 tenge per ton ($259.32), first-rate – to 36,400 tenge ($243.91), and second-rate flour – to 34,100 tenge ($228.5) per ton.
In Pavlodar region the price of wheat of 3 class is 25,600 tenge per ton, or $ 171.54 per ton; wheat of 4 class is sold by 23,500 tenge ($157.47). The price of barley is 25,000 tenge ($ 167.52) per ton. Flour of extra class costs 40,800 tenge ($273.39) per ton, first-rate flour costs 38,500 tenge ($257.98) per ton, second-rate flour costs 36,200 tenge ($ 242.57) per ton.
In Karaganda region wheat of 3 class costs 26,00 tenge ($174.22) per ton, wheat with gluten content above 27 percent costs 28,500 tenge ($190.97) per ton; wheat of 4 class costs 23,600 tenge ($158.14). The price of barley is 24,700 tenge ($165.51) per ton. In Karaganda, traders sell flour of all rates at the following prices: first-rate – 38,100 tenge ($255.3) per ton, second-rate – 35,800 tenge ($ 239.89) per ton and extra class – 40,400 tenge ($270.71) 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 25,800 tenge ($172.88) per ton, barley- 23,800 tenge ($159.48) per ton. In the West region of the country the price of wheat of 3 class fixed at 26,600 tenge ($178.24) per ton. The cost of first-rate flour in East Kazakhstan is 38,200 tenge ($255.97) per ton, second-rate flour costs 35,900 tenge ($240.56) per ton, and flour of extra class – 40,500 tenge ($271.38) 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 26,500 tenge ($177.57) per ton, wheat of 4 class – by 25,500 tenge ($170.87); barley of 2 class is sold by 24,500 tenge ($164.17) per ton. The cost of flour of extra class in this region is 41,100 tenge ($275.4) per ton, first-rate –38,800 tenge ($259.99) per ton, second-rate – 36,500 tenge ($244.58) per ton.
In Zhambyl region the price of wheat of 3 class for today costs 26,800 tenge ($179.58) per ton, barley of 2 class is sold by 25,100 tenge ($168.19) per ton. The cost of flour of extra class in this region is 40,800 tenge ($273.39) per ton, first-rate –38,500 tenge ($257.98) per ton, second-rate – 36,200 tenge ($242.57) per ton.
In the South Kazakhstan region wheat of 3 class is offered by 26,700 tenge ($178.91) per ton, wheat of 4 class – by 24,400 tenge ($163.5), barley – by 23,600 tenge ($158.14) per ton. The cost of flour of extra class in this region is 41,300 tenge ($276.75) per ton, first-rate – 39,000 tenge ($261.33) per ton, second-rate – 36,700 tenge ($245.92) per ton.
In Aktobe region wheat of 3 class is offered by 27,100 ($181.59). Flour of extra class can be purchased for 41,700 tenge ($279.43) per ton, first-rate – 39,400 tenge ($264.01) per ton, second-rate – 37,100 tenge ($248.6) per ton.
In Kyzylorda region wheat of 3 class is sold currently at 27,200 tenge ($182.26) per ton. The cost of flour of extra class is 43,500 tenge ($291.49) per ton, first-rate – 41,200 tenge ($276.07) per ton and second-rate – 38,900 tenge ($260.66) per ton.
In the south capital, Almaty, you can buy wheat of 3 class by 27,100 tenge ($181.59) per ton. Flour of extra class costs in Almaty 42,800 tenge ($286.8) per ton, first-rate – 40,500 tenge ($271.38), and second-rate – 38,200 tenge ($255.97) 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 $ 4-6 per ton. Barley became more expensive by $2. All flour varieties on the export borders rose by about 2 to 3 dollars per ton.
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 $204 per ton, with gluten content of 27-30 percent – $216 per ton. Barley costs $178 per ton. Flour of extra class is sold by $275, the cost of first-rate flour is $261 and the second-rate -$247 per ton.
At the elevators of the South Ural railway the current cost of wheat of 3 class is $ 174 a ton, wheat with gluten content above 27 percent – $187. The price of barley there is $148 per ton. Flour of extra class can be bought by $255, first-rate flour is $241 and the second-rate -$227 per ton.
At the station Sary-Agash (Kazakhstan – Uzbekistan, DAP) wheat of 3 class costs $208, wheat with gluten content above 27-30 percent – $231. The price of barley there is $183. Flour of extra class can be bought by $276, first-rate flour is $262 and the second-rate -$248 per ton.
At the station Tobol (DAP) wheat of 3 class costs $196, wheat with gluten content above 27-30 percent – $208. Barley is sold by $153 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 Amuzang (Uzbekistan – Tajikistan, CPT) – the cost of wheat of 3 class is fixed at $255 per ton; wheat with gluten content above 27-30 percent is sold by $268 per ton. Flour of extra class is offered by $314, first-rate flour is $302 and the second-rate – $284 per ton.
The average price of wheat of 3 class at the the station Hajraton (Uzbekistan – Tajikistan, CPT) is $261 per ton; wheat with gluten content above 27-30 percent is sold by $268 per ton. Barley can be bought by $241 per ton. Flour of extra class is offered by $330, first-rate flour is $315 and the second-rate – $295 per ton.
At the station Sarahs wheat of 3 class on the CPT terms is sold by $261per ton; wheat with gluten content above 27-30 percent is sold by $267, barley – $250. Flour of extra class is sold by $338, first-rate flour is $323 and the second-rate – $302 per ton.
In the port of Aktau on FOB conditions wheat is sold by $233, wheat with gluten content above 27-30 percent is sold by $ 256, barley – $ 228. Flour of extra class is sold by $290, first-rate flour – by $276 and second-rate – by $262 per ton.
Reference: $1 = 149.57 tenge, 1 euro = 187.13 tenge, 1 ruble = 4.60 tenge, 1 som = 3.16 tenge, 1 pound sterling = 233.00 tenge, 1 hryvna = 18.56 tenge.
Alimbek Gabitov
