WASHINGTON, D.C., U.S. — Production data from the Kazakhstani Statistical Agency shows total grain production in 2015 at 18.2 million tonnes and total wheat production at 13.7 million tonnes, 6% more than last year, the U.S. Department of Agriculture’s (USDA) Foreign Agricultural Service said in a Jan. 15 report. Kazakhstani currency devaluation affected export prices, pushing Kazakhstani exports up significantly. Wheat stocks have again remained flat.
The 2015 harvest was delayed until early November due to rain in the northern region of Kazakhstan. However, despite this delay official statistics indicate that harvest was completed on 98% of planted area (11.57 million hectares out of 11.77 million hectares planted). Additionally, the increase in wheat production can be attributed to a greater use of mineral fertilizer treatments. Unfortunately, traders report that the majority of grain produced has high moisture content, resulting in lower quality wheat and additional costs for drying.
As part of Kazakhstan’s crop diversification strategy and goal to create domestic, value–added products, the Kazakhstani Ministry of Agriculture is considering the construction of three new oilseeds processing facilities. Total processing capacity of these projects would be 1.2 million tonnes, which equates to roughly half of Kazakhstan’s oilseed production. The Ministry of Agriculture also recently announced that there is some foreign investor interest in such projects, including an oilseeds and grains processing facility joint project with China. This particular facility will be located in the North-Kazakhstan region and is projected to cost $58 million, with a design capacity of 80,000 tonnes of oil, 200,000 tonnes of flour and 200,000 tonnes of feedstuff.
Starting Jan. 1, the Kazakhstani “Social bread” subsidies were cancelled. However, because of the impact for the low-income population, some regional governments decided to continue subsidizing bread production.
From August through November 2015 following the devaluation of the tenge, Kazakhstani exports tripled.
Although Kazakhstani grain exports have climbed over the last year because of the tenge devaluation, grain analysts believe that there are a number of different, competing economic and political factors, which affected Kazakhstan’s wheat and grain exports:
• The costs of exporting to Iran increased – the railway service tariff increased 3% and expenses at the Aktau grain terminal services increased 4%;
• Exports routes via Turkey or Iran are blocked as a reflection of Russia-Turkey and Iran-Saudi Arabia relations;
• Traders are actively exporting barley to Iran prior to the Spring Equinox holiday in Iran on March 10th