The country’s barley production is forecast at 2.8 million tonnes in 2016, only slightly higher than in 2015 (2.6 million tonnes). This increase in production is based on projected higher sown and harvested area.
The Kazakh Ministry of Agriculture recently reported that total planted area in 2016 will be 21.6 million hectares, which is 413,000 hectares (or 2%) higher than in 2015. The spring planting area will reach 18.4 million hectares. The demand for spring planting seeds in 2016 is estimated at 2.4 million tonnes. This level of demand will result in a deficit of more than 10,000 tonnes of seed, necessitating significant seed imports.
All grains sown area will reach 15.2 million hectares, compared to 11.7 million in 2015; oilseed area will increase to 1.9 million hectares, a little less compared to 2 million hectares in 2015; and feed crops will increase to 4 million hectares, or 8% higher compared to 3.7 million hectares in 2015. Since wheat area has not been declared for 2016, the report estimates wheat area in 2016 at 11 million hectares, 570,000 hectares less than harvested area in 2015.
Since the bumper crop in 2009, area sown to wheat has steadily decreased to a current total of approximately 11 million hectares (or a 26% reduction over 8 years). This decline in wheat area is largely as a result of the ongoing strategy of crop diversification.
Unlike wheat area, the acreage sown with oilseeds nearly doubled between 2009 and 2014. However, oilseeds area has gradually declined over the last two years.
Food, seed, and industrial (FSI) consumption for wheat is expected to remain unchanged in marketing year 2016-17 at 4.8 million tonnes. Although flour consumption is expected to grow along with population growth, seed use is forecast to continue to fall as planted area shifts away from wheat.
Feed use of wheat in market year 2016-17 is forecast to be flat. Although wheat remains the most fed grain in Kazakhstan for livestock, most of the increase in feeding in future years is expected to be in barley and other feed grains and grasses, due to the government’s strategy to increase area to these crops.
Feed use of barley in market year 2016-17 forecast at 1.8 million tonnes, higher from 1.6 million tonnes in market year 2014-15 on the background of the new feed mills projects, which are starting launching in Kazakhstan and increasing demand for barley in Kazakhstan.
As of March 1, nearly 80% of wheat is used for food consumption, 14% for seeds and 5% for feed. Barley consumption includes 35% for food, 25% for seeds and 39% for feed. A year ago wheat consumption was nearly identical to the 2016 data, showing 80% for food, 14% for seeds and 5% for feed.
Meanwhile barley consumption structure change slightly towards increase of food use, but this is happening on the background of 200,000 tonnes less as of March 1.
Market analysts believe that market year 2015-16 was one of the best seasons for flour trading within the last nine years. The principle reason behind the strong sales was the devaluation of the national currency which made Kazakhstani flour extremely price competitive.
However, Kazakhstani wheat flour exporters are also dependent on the financial situation of Central Asian importers and other Central Asian countries experienced devaluations of national currencies. Additionally, Afghanistan, a major flour importer from Kazakhstan, has demonstrated a preference for lower quality, cheaper wheat flour, such as fourth and fifth class which still suits round bread baking.
Some southern and eastern Kazakhstani flour mills initiated wheat flour exports to China. However, these Chinese importers impose very specific import requirements, such as flour must be bagged only in two-kilogram bags. This has sent flour mills urgently scrambling to meet the Chinese import requirements in order to act on these new market opportunities.