Kazakhstan: Grain Prices Could Double

Kairbek Zhalgapbayev, a grain trader from the Aqmola region, believes that the country's reserves will run out in five to six months, resulting in a price rise, Orda.kz reports, citing APK News. 

The government previously noted that the grain harvest was a third more than last year.

However, according to the trader, the actual harvest volume in Kazakhstan is significantly lower than what was officially announced. 

We don't have much of a harvest. There are no 26 million tons in the country. Feel free to subtract 25% from the officially declared volume - that's what we harvested this year, says Zhalgapbaev.

He says false reporting remains an issue. Despite a good harvest for some producers, most have much more modest figures. 

Even one of the largest grain producers from Aqmola region said that his yield was 20-30 centners. If he has 45-47 thousand hectares with grain, then by the end of the harvest he showed that he had collected 43 thousand tons of grain. But this cannot be. If you calculate, it should be 130 thousand tons. And where did 80 thousand tons go? asks the trader. 

In Northern Kazakhstan, large farms that did not pad statistics report harvests of 14 centners per hectare, as in previous years. At the same time, official data from officials indicate that elevators remain half empty.

Grain As An Investment

Zhalgapbayev believes farmers should not rush to sell their grain now. The country's reserves will run out in five to six months when exports will amount to five to six million tons. Then the price will go up. 

It may be that the price will double. Farmers should not sell at such a low price as 40-50 thousand tenge now. And Russia will either start imposing quotas or seriously limiting exports by spring, the expert believes.

The expert also discussed railway tariffs and the need to improve export conditions. Kazakhstan and Russia need to agree on proportional rates.

In the 2000s, four million tons of grain were sold from Kazakhstan to Europe through Russian ports. Then Uzbekistan and Tajikistan took substandard grain from us, and we took cheap grain at the highest price because the main three to four million tons went to Europe. Remember 2022, when quotas were introduced - wheat immediately became more expensive. Now we also need to make a quota of 500 thousand tons for export, and send to the Black and Baltic Seas without a quota. The Europeans will not 'break' our prices, it will be adequate,
 comments Zhalgapbayev.

Zhalgapbayev notes that the decline in prices for Kazakhstan's grain is due to the actions of neighboring countries. Uzbekistan, Tajikistan, and Afghanistan open companies buy grain at low prices and then resell it with a markup.

To stabilize prices, quotas should be provided only to Kazakhstani companies.

Zhalgapbayev thinks that if the price is set at 60-70 thousand tenge with the addition of a margin, this will increase the price by 80 dollars per ton and increase demand. 

Russia initially stopped importing Kazakhstan's grain; now China is also reluctant.

The trader sees no reason to panic and look for new markets. 

European companies left our market after the government imposed bans. They 'squeezed' them out, but Uzbeks, Tajiks, and Afghans remained. Global traders could then freely buy one million tons. Their markets are Africa and Asia. They bought and kept it in storage... We need to analyze past years, not make hasty decisions and conclusions, not introduce ill-considered bans, and bear constant responsibility. In a word, work wisely, explains the trader. 

Original Author: Alina Pak