Kazakhstan grain market: first results of the grain season-2012/13 PDF Print E-mail
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Sunday, 07 April 2013 11:11

Season-2011/12 saw a record grain crop in Kazakhstan. Kazakh agrarians harvested almost 27 mln tonnes of grain last season among which wheat totaled 22.7 mln tonnes. So we could not objectively compare the trends and tendencies of the current season with the last one. So APK-Inform experts compared and contrasted the initial results of season-2012/13 with the same period of 2010/11 MY.

Harvest: you could not step twice into the same river

2012/13 MY was rather calm. Kazakh p


roducers harvested nearly 12.9 mln tonnes of grain among which wheat totaled 9.8 mln tonnes. Last season crop totaled 12.2 mln tonnes with 9.7 mln tonnes of wheat. We should note that Kazakh grain producers reduced the wheat area to 16.3 thsd ha in 2012/13 MY compared to 16.6thsd ha in 2010/11 MY. Moreover, unfavorable weather conditions during the planting and growing seasons also had an impact on the grain crop. Taking to account all these factors we did not expect the increase the grain harvest.

At the same time, representatives of export-oriented companies were rather optimistic because they can export 5 mln tonnes especially if they take to account carry over stocks (5 mln tonnes at the beginning of the season). Moreover, the export demand from traditional buyers of Kazakh grain such as Uzbekistan, Tajikistan and Afghanistan was rather high and U.S. Ministry of Agriculture forecast Kazakh wheat export at 7 mln tonnes.

Crop name

2010


2011

2012

planted area, thsd ha

harvested area, thsd ha

yeild, t/ha

harvest, thsd t

planted area, thsd ha

harvested area, thsd ha

yeild, t/ha

harvest, thsd t

planted area, thsd ha

harvested area, thsd ha

yeild, t/ha

harvest, thsd t

Grain and legumes (for grain)

16 619

15 155

0,80

12 185

16 219

15 992

1,69

26 960

16 256

14 959

0,86

12 865

 

Wheat (winter and spring)

14 261

13 138

0,73

9 638

13 848

13 686

1,66

22 732

13 464

12 410

0,79

9 841

 

 

Wheat exports: high supply with no buyers

 

New export season faced some delay in Kazakhstan due to heavy rains during the harvest. Normal trade activities began only in late September - early October 2012. Typically Kazakh grain trading companies are rather active within this period. But despite the late start the demand fromUzbekistan, Tajikistan and Afghanistan was active and stable. But since the end of October the demand for Kazakh grain dropped sharply to 296 thsd tonnes in November as opposed to 335.3 thsd tonnes in October. Compare, in the same period of 2010/11 MY the country shipped 553.9 thsd tonnes in Oct and 344.3 thsd tonnes in November. So the export-oriented companies are afraid of further reduction of demand. They suppose that the importers buy grain and particularly wheat only on an as-needed basis due to high prices. They do not wish to conclude long-term contracts in a similar price volatility.


Kazakhstan exported 1.8 mln tonnes of wheat from the beginning of the season as opposed to 2 mln tonnes in the same period in 2010/11. At a glance the difference is not so significant but Kazakh exporters do not expect the growth of grain export due to further price stability.

The transfer of rolling stock "Kazakhstan Temir Joly" to the private company "Kaztemirtrans" wasthe next problem for traders. Firstly the transfer took more time than it was expected that caused some difficulties for grain suppliers.

In particular, many traders were forced to change the terms of wheat supply due to the absence ofgrain cars. Secondly these actions resulted in rising of prices for grain delivery (price growth totaled nearly 10% from current prices). As result the price for grain delivery to the final user also went up.

 

 

Price: compromise is impossible

At the beginning of the season (early August) the price was 336 USD/t DAP Sary-Agash as opposed to 220 USD/t two seasons ago. A sharp rise in prices by the middle of October was the next problem for Kazakhstan market operators. Wheat offer price reached 360 USD/t (260 USD/t in 2010/11).

Kazakh prices were higher compared to the ones on CBOT and MATIF, so importers did not conclude the contracts.

The Kazakh wheat price on foreign markets increased due to its growth on the domestic market.Producers offered the grain at 40-43 thsd tenge (267-287 USD/t) per tonne.

Barley prices also increased to 315 USD/t by the middle of October as opposed to 205 USD/t in the beginning of the season. Grain started in the market with the 135 USD/t at the beginning of 2010/11 MY and reached 184 USD/t by mid-October.

 

 

 

Results and prospects

 

According to Kazakh exporters the trade activity will not change significantly within the second half of 2012/13 MY with prices a bit lower.

We can note that Kazakhstan can export 7 mln tonnes of grain this year.

As to the logistics we could mention that Kazakhstan actively buys new grain cars, builds elevatorsand tries to expand distribution areas. So, we can expect Kazakh market to develop in future.

 

 

Last Updated on Sunday, 07 April 2013 18:27