The results of the Kazakhstan’s harvest 2013 can affect the price of grain in the region

Новость на Казах-зерно:

In Kazakhstan, the harvesting is being finished, but many farmers believe that the growing season was not a success. Friendly sowing in a wet soil and good shoots in early summer gave farmers a hope for a qualitative and rich harvest in the fall. But they failed to materialize in full. First crops have undergone prolonged heat and drought, which delayed and shifted the time of the natural vegetation of plants. Then the heavy rains in late July and August stimulated the development of many weeds and diseases. Qualitative parameters of grains fell sharply and led to an increase in the cost of harvesting works. As a result, the grain this year will be more expensive and less qualitative, according to farmers.

Kazakhstan

Bad weather in the north of Kazakhstan significantly delayed the harvesting campaign. Despite the overall high rate of grain collection on October 4 – 86.4% of the total sown area, according to the regional agricultural department, still a lot of fields are not harvested in the North Kazakhstan and Akmola regions. Here are expected the highest absolute levels of harvest in 2013. Recently, the head of the Farmers Union of Kazakhstan Auezkhan Darinov in an interview with the media announced the approximate price of grain procurement. “In the near future may be declared a purchase price of grain in Kazakhstan. The recommended price for wheat of 3 class is 25 thousand, he said. The probability of this decision is very high”, said A. Darinov.

In Kazakhstan, the harvesting campaign of crops is at the finish line. According to the calculations of yields and harvest, it is already possible to judge the amount of the current crop. It will be much higher than last year, but quality of grain is poor. This year summer weather conditions, marked by prolonged dry weather in June and then the cool and rainy period in July and early August have left their negative impact on the maturation of plants. There was a delay in development and by mid-August in the northern regions the grains were not ready for harvest. Therefore, the beginning of mass harvesting campaign was essentially tackled at a later date. This created additional risks for farmers and reduced the productive time of harvesting.

But by September 13, the pace increased significantly. During 4 days Kazakh grain farmers gathered grain from 10.3% of the total harvested area and threshed about 7,515.9 thousand tons of grains in bunker weight. The highest pace of harvesting in those days was observed in Akmola and Kostanay regions. In the North- Kazakhstan region harvesting speed was lower because of the rains in the region at the beginning of the week. From September 13 to September 20 grain producers gathered grain from almost 20% of the harvested area.

By 20 September, when the harvesting campaign in Kazakhstan exceeded the middle, it became possible to talk about the prospects of the harvest with greater certainty. On this date in Kazakhstan has been removed 9782.5 thousand hectares of arable land , or 62.1 % of the total harvested area; it was threshed 11,872.5 thousand tons of grain with an average yield of 12.1 tons per hectare. The pace of harvesting is quite high, helped by dry weather on the mainland of the largest grain-producing regions.

Crop prospects-2013

Having data on primary productivity in all grain-producing regions of Kazakhstan, we can talk about the alleged amount of crop throughout the country and in each region separately. Provided that the productivity in areas will be maintained at about the same level until the end of the harvest, as of September 20, it may be noted that the leader in the volume of the received harvest this year will once again be the North-Kazakhstan region. Here is the highest grains yield of the three major grain producing areas, but the smallest size of the harvested area. Akmola region and beyond Kostanay region are following it with a very small gap.

In 2013 the North-Kazakhstan region can obtain the crop of about 4.87 million tons; in the Akmola region – 4.78 million tons; Kostanay – about 4.5 million tons. In East Kazakhstan will be received about 0.95 million tons, in Almaty – 0.89 million tons, in Pavlodar – about 0.76 million tons, and in Karaganda – about 0.75 million tons. Below the level of 0.5 million tons will be produced in Aktobe, Zhambyl, West Kazakhstan and Kyzylorda regions. As a result, in general, Kazakhstan this year could get a harvest of about 19.1 million tons. This is 4.2% more than the previous estimate.

About the same forecast for the harvest in Kazakhstan gives the international community of experts – USDA. In its August report, USDA raised its forecast for wheat production in Kazakhstan by 2.5 million tons to 17 million tons. In its September forecast of production of agricultural products in the world USDA confirmed its August forecast of wheat production in Kazakhstan at 17 million tons. In addition to wheat, according to the forecast of the USDA, in Kazakhstan will be collected about 3 million tons of other cereals, of which 2.2 million tons will be barley. An export forecast was also increased by 2.5 million tons to 9.5 million tons. Thus, according to the forecast of the USDA, in Kazakhstan will be collected about 20 million tons of grain, which with little difference corresponds to the calculated forecast for September 20.

Much lower yield is predicted for Kazakhstan by the International Grains Council (IGC). In the recent report of IGC, published Aug. 30, forecast for grain harvest in Kazakhstan was increased from 16.2 to 16.8 million tons, of which 14 million tons will fall for wheat, and the rest to other crops. However, in the September report, which was released on September 26, the forecast was lowered, although by only 0.1 million tons – to 16.7 million tons. Of all the grain, according to IGC, will be harvested about 14 million tons of wheat. Kazakhstan’s export potential, according to the IGC, is equal to 7.2 million tons.

We recall, the grain harvest in Kazakhstan in 2010 amounted to 12,185 million tons, in 2011 – 26.9605, and in 2012 – 12.8648 million tons.

Prices

The pricing of the new grain has not yet been completed. In many ways, it depends on the dynamics of the world market conditions and the situation in the grain market of Kazakhstan’s competitors – Russia and Ukraine. Much also depends on the behavior of the State Grain operator on the domestic market. Kazakhstan’s largest grain operator “Food Contract Corporation” refers only approximate price.

Previously, the Food Corporation reported: “As long as there is no mass supply of wheat to the elevators, the Food Corporation cannot speak objectively about the quality of the grain harvest, and, as a consequence, about the optimal purchase price”. Given the separate trends of prices on grain markets of neighbouring countries and beyond, the present market price of soft milling wheat of 3 class in Kazakhstan ranges within 25-27 thousand tenge per ton ( 163.4 – 176.5 dollars per ton ) is acceptable for the current period .

«So, given these factors, as well as complicated harvesting, we see no compelling reason to reduce the price”, summed up in the department. And recently the head of the Farmers Union of Kazakhstan Auezkhan Darinov in an interview with the media announced the approximate price of grain procurements. In the near future may be declared purchase price of grain in Kazakhstan. The recommended price for whe of 3 class is 25 thousand tenge, he said. – The probability of this decision is very high”, said A.Darinov.

World market prices do not correspond to the expectations of grain producers, although in the last week of September, the price of wheat significantly strengthened. From September 20 to September 27, wheat futures rose during all the time in the U.S. and Europe. In London, wheat rose for the week period by 3.8 %, in Paris by 4%, and in Chicago by 5.7%. Corn in the U.S. increased in price by 0.7 %, soybeans – by 0.4%. Rapeseed increased in price by 1.2 %, and barley fell by 2.4 %.

On October 3, in the U.S. on the Chicago Board of Trade (CBOT) wheat futures fixed at $6.8825 per bushel ($252.9 per ton), and corn – $4.39 dollars per bushel ($172.5 per ton). In Europe, on October 3, on NYSE LIFFE Exchange in London wheat contracts for November delivery rose from 156.6 to 159.65 pounds, or by 1.9% ($258.4). On MATIF Exchange on October 3, contracts for November delivery rose from 192.75 to 195 euros per ton, or by 1.2% ($ 263.7). Futures for delivery in January increased in price from 193 to 195 euros per ton, or by 1% ($263.7).

Still, prices are significantly lower than last season. For comparison, in the U.S. last year on the Chicago Board of Trade (CBOT) wheat futures on October 3 cost $8.74 per bushel ($320.1 per ton), and corn $7.6125 per bushel ($278.8 per ton).

In Europe last year, on October 3, there was no change on commodity exchanges. On October 2, on NYSE LIFFE Exchange in London wheat contracts for November delivery fell from 200.95 to 200 pounds per ton, or by 0.5% ($322.8). On MATIF Exchange in Paris on October 3 futures for November delivery decreased in price from 262.5 to 259.25 euros per ton, or 1.2% ($333.6).

As can be seen from the comparison, the difference is quite significant. A significant drop of prices in world market is due to the higher forecasts for world grain output in the 2013-14 marketing season. The surplus of the grain balance pulls down the futures in the futures market. This, in turn, has a negative impact on the prices on the spot market. In the domestic market of Kazakhstan during all September dominated the falling trend, and so far in the major grain-producing regions of the price EXW for wheat of 3 class ranged from 27 to 28 thousand tenge per ton, and barley – at about 24 – 25 thousand. tenge per ton.

Grain exports

According to the data received from Customs Control Committee (CCC), in the second month of the 2013-14 MY exports of Kazakh grain predictably began to decline. According to statistical information of the CCC, in August Kazakhstan shipped 135.1 thousand tons wheat flour or wheat-rye flour, which is slightly lower than in July (151.8 thousand tons).

But for wheat and meslin exporters have lost almost a quarter of shipments: if in July, their result was 275.1 thousand tons, totaling $67,163 thousand, then in August they managed to send abroad only 206.7 thousand tons amounting to $45.8 million. For comparison, in June shipments of wheat totaled 317 thousand tons.

Recipients of Kazakh grain are traditionally divided into two categories: the countries of the CIS and the rest of the world. In this aspect, in August, exports to non-CIS countries were hurt more, having fallen down almost by half. To the CIS countries was sent 150.4 thousand tons, compared with 181.3 thousand tons in July. The rest of the world imported 56.3 thousand tons of grain instead of 93.8 thousand tons in July.

Among the major importers of Kazakh wheat in August from CIS countries was Azerbaijan, which has succeeded to hold the palm of victory during all the warm period, finally lost it in the late summer and Uzbekistan occupied the leading position. Deliveries to Azerbaijan continued negative trend: 50.3 thousand tons – August, 72 thousand tons – in July, more than 100 thousand tons – June. A somewhat different story with Uzbekistan: 57.7 thousand tons – August, 61.7 thousand tons – July, 43.3 thousand tons of grain – June. A little added Tajikistan – 31.2 thousand tons in August; let’s compare them with 29.5 thousand tons. But this is after it has cut grain exports by nearly two times: 55.5 thousand tons in June. Deliveries to Kyrgyzstan demonstrate the stability, though of a negative character: the May figure was of 11 thousand tons, then it rose sharply to 27.8 million tons in June, and in July was down again – 18 thousand tons, and in August – another step down – 11 thousand tons of wheat.

Regarding to foreign countries, the main importer, Iran has reduced the extent of its attention to Kazakh grain. Deliveries in June – exceeded the May figure ten times – 51.8 thousand tons. They were fixed and “improved” in July – 59.9 thousand tons. Unfortunately, in August this scale crept down – 32.1 thousand tons. However, the leader’s place is up to our southern neighbors in the Caspian Sea. The second place occupied Georgia. During all the summer foreign countries in turn changed on a pedestal, as if yielding to each other. In July, Sweden – “outsider” of our June derby surprised us with 17.7 thousand tons of purchased grain. In August delivery fell to a little more than one thousand here. And Georgia, in July, received 5.9 million tons of Kazakh grain, improved the rate in August by almost three times 15.4 thousand tons. China bought 5.8 thousand tons compared to 7.9 thousand tons in July.

In August Kazakhstan exported barley in the amount of 2,616 tons. This weight was shared by Azerbaijan and Uzbekistan but not in equal shares.

In August it was shipped 135,117 tons of flour abroad; compare them with 151,898 tons in July. The main beneficiaries of our flour are still the CIS countries. They were delivered about 80% of the total weight, or 105,054 tons (-20 tons compared with July). Again, in the context of importing countries stands out Uzbekistan, which bought from Kazakhstan in the period about 85.2 thousand tons, which is 2.5 thousand tons more than in July. To Tajikistan was delivered 13.3 thousand tons (+2 thousand tons). We should also note Kyrgyzstan. It imported 2.3 thousand tons, a decrease for the month immediately by 17,000 tons.

These are probably the consequences of restrictive measures that were put in the middle of summer by Kyrgyz side. However, there appeared new routes, or rather, well-forgotten old routes: Turkmenistan bought 4,021 tons, Moldova received 100 tons. The main and sole importer of Kazakh flour among the foreign countries was Afghanistan. In August it was shipped 29.7 million tons in this direction, exactly a thousand less than July exports. These are the results of the second month of the 2013-14 marketing season, which were reported yesterday by customs officers. And in the present reality in Kazakhstan is coming to the end the harvesting of a new crop. According to the experts who have good collapse of 4-5 million tons, Kazakhstan can get from 15 to 19 million tons of grain in net recorded weight. According to official information received today, the bins are filled with 17 million 163.4 thousand tons of grain from the harvest-2013….

The exchange trading and prices

From September 6 to September 27, on the ETS Exchange took place some transactions for wheat of 3 class, sugar, food and feed barley. The dynamics of trading, the volume of transactions and prices of agricultural products looked at the stock exchange as follows:

From September 6 to September 13, on the ETS stock exchange took place 25 transactions for wheat of 3 class. It was sold 209,918 tons of wheat amounting to 5,237,996,500 tenge, or $34,152,680. The average transaction price last week was 24,952.5 tenge per ton of wheat. Compared with the previous week the average price decreased by 6,492.6 per ton tenge.

For sugar during a week only took place 67 deals on the bases CPT, EXW. It was sold 7,652 tons of sugar in the amount of 892.246 million tenge. The average price of sugar was 116,602.9 per ton.

On the stock exchange were made 2 transactions on barley. Barley for food purposes was sold on the basis EXW with VAT. One transaction took place, and it was sold 1,000 tons of barley by 18,500 tenge per ton in the amount of 18.5 million tenge.

Two deals on wheat of L class passed on DAP conditions without VAT (the border of the Republic of Kazakhstan). It was sold 9,000 tons of wheat in the amount of 199.16 million tenge. On the EXW basis with VAT were made 23 transactions; it was sold 197,518 tons of wheat in the amount of 4,943,636,500 tenge. One deal was made on the basis FCA with VAT. It was sold 3,400 tons of wheat in the amount of 95.2 million tenge.

From September 13 to September 20, on the ETS Exchange took place 45 transactions for wheat of 3 class. It was sold 139,260 tons of wheat in the amount 4,317,437,906 tenge, or $28,224,084.6. The average transaction price last week was 31002.7 tenge per ton of wheat. Compared with the previous week the average price increased by 6,050.2 tenge per ton. During the week was made 76 transactions for sugar on the basis CPT and EXW including VAT. It was sold 7,290 tons of white sugar in the amount of 859,261,000 tenge. The average price of sugar was 117,868.4 tenge per ton.

Last week 2 transactions for barley took place on the stock exchange. Feed barley was sold on EXW basis including VAT at the price of 20,000 tenge per ton. It was sold 25,000 tons of barley in the amount of 500,000,000 tenge.

Of all the wheat sold 18 transactions were made on DAP conditions without VAT (the border of the Republic of Kazakhstan). It was sold 39,662 tons of wheat in the amount of 1,434,621,348 tenge. On EXW basis including VAT took place 24 deals; it was sold 77,216 tons of wheat in the amount of 1,953,075,000 tenge. Three transactions took place on FOB conditions without VAT. It was sold 22,382 tons of wheat totaling 929,741,558 tenge.

On the last trading week from September 20 to September 27 on ETS Exchange were made 12 transactions for wheat of 3 class. It was sold 90,040 tons of wheat, amounting to 2,332,612,500 tenge, or $28,224,084.6. The average transaction price last week was 25,906.4 tenge per ton of wheat. Compared with the previous week the average price decreased by 5,096.3per ton tenge.

During the week only took place 69 transactions for sugar on CPT and CPT conditions. It was sold 8,600 tons of white sugar in the amount of 987,690,056 tenge. The average price for sugar was 114,847.6 tenge per ton. For barley there were no deals last week on the stock exchange.

On EXW conditions including VAT took place 10 transactions; it was sold 83,240 tons of wheat in the amount of 2,105,280,000 tenge. One deal was made on FOB conditions without VAT. It was sold 3,400 tons of wheat at the price of 38,362.5 tenge per ton, amounting to 130,432,500 tenge. One transaction took place on FCA conditions including VAT. IT was sold 3,400 tons of wheat at the price of 28,500 tenge, in the amount of 96,900,000 tenge.

***

Currently, you can buy wheat of 3 class from new harvest in Astana for 29,300 tenge ($190.14; here and further is applied the exchange rate of National Bank of Kazakhstan on 10/05/2013) per ton. First-rate flour in the capital of our country costs 50,000 tenge ($325.42) per ton. Second-rate flour is sold by 52,400 tenge ($341.08) per ton. Flour of extra-class costs 46,300 tenge ($301.37) per ton.

A ton of wheat of 3 class can be purchased for 26,800 tenge ($173.92), wheat with gluten content above 27 percent – for 28,600 tenge per ton ($185.6), barley of a 2 class now costs 27,800 tenge ($180.95) per ton in Akmola region. Flour of extra class costs 50,300 tenge ($329.3), first- and second-rate flour is offered at 47,800 tenge ($313) and 43,800 tenge per ton ($287), respectively.

In the North Kazakhstan region wheat of 3 class is sold by 26,600 tenge ($172.62) per ton, wheat with gluten content above 27 percent – by 29,100 tenge ($188.84). The current price of barley is 24,800 tenge per ton ($161.43). In the North Kazakhstan the price of flour of extra class is 48,300 tenge per ton ($314.39); first-rate flour costs 45,900 tenge ($301) and second-rate flour costs 43,300 tenge per ton ($284).

In Kostanay region the price of wheat of 3 class rose to the level of 26,700 tenge per ton ($173.27). Wheat with gluten content above 27 percent is sold at 28,500 tenge ($184.95). The price of barley of 2 class is 24,600 tenge ($160.12) per ton. The market price of flour of all classes went down: extra class – to 48,000 tenge per ton ($314), first-rate – to 45,000 tenge ($295) and second-rate flour to 42,500 tenge ($278) per ton.

In Pavlodar region the price of wheat of 3 class is 28,400 tenge per ton, or $ 184.3 per ton. The price of barley is 26,700 tenge ($173.79) per ton. Flour of extra class costs 51,400 tenge ($337) per ton, first-rate flour costs 50,000 tenge ($327) per ton, second-rate flour costs 45,400 tenge ($297) per ton.

In Karaganda region wheat of 3 class costs 28,400 tenge ($184.3) per ton, wheat with gluten content above 27 percent costs 29,800 tenge ($190.72) per ton. The price of barley is 27,650 tenge ($179.98) per ton. In Karaganda, traders sell flour of all rates at the following prices: first-rate – 50,300 tenge ($329.3) per ton, second-rate –47,300 tenge ($310) per ton and extra class –53,000 tenge ($347) per ton.

In the East Kazakhstan region of the country the price of wheat of 3 class fixed at 28,500 tenge ($184.95) per ton, barley – 26,600 tenge per ton ($173.14). In the West of the country wheat of 3 class costs 31,700 tenge ($205.72). The cost of first-rate flour in East Kazakhstan is 50,100 tenge ($328) per ton, second-rate flour costs 45,700 tenge ($299.18), per ton, and flour of extra class – 53,000 tenge ($347) per ton. In the West Kazakhstan prices for flour are as follows: extra class costs 52,000 tenge ($340.43), first-rate –48,800 tenge ($317.61), second- rate -45,800 tenge ($300) respectively.

In Almaty region the price of wheat of 3 class for today is offered by 29,700 tenge ($192.74) per ton. Barley of 2 class is sold by 27,500 tenge ($179) per ton. The cost of flour of extra class in this region is 54,000 tenge ($354) per ton, first-rate –51,400 tenge ($337) per ton, second-rate – 48,700 tenge ($319) per ton.

In Zhambyl region the price of wheat of 3 class for today costs 30,100 tenge ($195.33) per ton, barley of 2 class is sold by 28,300 tenge ($184.21) per ton. The cost of flour of extra class in this region is 54,200 tenge ($356) per ton, first-rate –51,800 tenge ($339.12) per ton, second-rate – 49,700 tenge ($325.37) per ton.

In the South Kazakhstan region wheat of 3 class is offered by 30,000 tenge ($194.68) per ton, barley – by 28,600 tenge ($186.16) per ton. The cost of flour of extra class in this region is 54,300 tenge ($356) per ton, first-rate – 51,100 tenge ($335) per ton, second-rate –47,000 tenge ($307) per ton.

In Aktobe region wheat of 3 class is offered by 30,200 ($195.98), Flour of extra class can be purchased for 55,900 ($366) per ton, first-rate – 51,300 tenge ($336) per ton, second-rate – 49,000 tenge ($321) per ton.

In Kyzylorda region wheat of 3 class is sold currently at 30,600 tenge ($198.58) per ton. The cost of flour of extra class is 55,200 tenge ($361.37) per ton, first-rate – 52,400 tenge ($343.04) per ton and second-rate – 49,400 tenge ($323.4) per ton.

In the south capital, Almaty, you can buy wheat of 3 class by 29,500 ($191.44) per ton. Flour of extra class costs in Almaty 55,000 tenge ($360.07) per ton, first-rate – 52,000 ($340.43), and second-rate – 49,000 tenge ($321) per ton, respectively.

As you can see, the table of prices for Kazakh 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 $215-225 per ton, with gluten content of 27-30 percent – $226-235 per ton. Barley costs $186-196 per ton. Flour of extra class is sold by $380-391; the cost of first-rate flour is $362-374 and the second-rate -$ 340-352 per ton.

At the elevators of the South Ural railway the current cost of wheat of 3 class is $180-192 per ton, wheat with gluten content above 27 percent – $192-202. The price of barley there is $154-164 per ton. Flour of extra class can be bought by $359-370; first-rate flour is $344-356 and the second-rate – $320-332 per ton.

At the station Sary-Agash (Kazakhstan – Uzbekistan, DAP) wheat of 3 class costs $218-228, wheat with gluten content above 27-30 percent – $228-238. The price of barley there is $182-192. Flour of extra class can be bought by $384-395, first-rate flour is $340-352 and the second-rate -$313-325 per ton.

At the station Tobol (DAP) wheat of 3 class costs $187-197, wheat with gluten content above 27-30 percent – $205-215. Barley is sold by $206-216 per ton. Flour of extra class can be bought by $366-378, first-rate flour is $352-361 and the second-rate -$333-345 per ton.

The average price of wheat of 3 class at the station Hajraton (Uzbekistan – Tajikistan, CPT) is $302-312 per ton; wheat with gluten content above 27-30 percent is sold by $319-328 per ton. Barley can be bought by $257-267 per ton. Flour of extra class is offered by $456-467, first-rate flour is $442-454 and the second-rate – $422-435 per ton.

In the port of Aktau on FOB conditions wheat is sold by $228-239, wheat with gluten content above 27-30 percent is sold at $239-250, barley – $214-224. Flour of extra class is sold by $405-417, first-rate flour – by $402-413 and second-rate – by $374-386 per ton.

Reference: $1 = 154,15 tenge, 1 euro = 209,80 tenge, 1 ruble = 4,80 tenge.

Alimbek Gabitov

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