Kazakhstani producers of grain have temporarily stopped the export of wheat to China due to low prices offered by Chinese importers, according to Zeinolla Abdumanapov, head of the National Association of Exporters KazGrain.
«The Chinese side currently offers $240 per ton. However, Kazakhstani exporters think that this is too low given that there are many factors affecting the actual price. They want at least $245-250 per ton from the Chinese,» he said.
As the official noted, Kazakhstan Railways has cleared this month’s export of 23 railway trains loaded with grain toward China. However, as of July 13, none of them crossed the border because Kazakhstani traders and Chinese importers failed to agree on wheat prices.
China is no longer a key importer of Kazakhstani wheat. In 2021, this destination accounted for just 165,500 tons of Kazakhstani wheat (3%). In 2022, this amount dropped to 36,600 tons as the Chinese government launched an anti-COVID-19 campaign and closed the country’s borders. In the spring of 2023, Kazakhstan once again started its export of grain to China. At the time, Kazakhstani authorities said that they were planning to boost wheat exports to China to one million tons per year.
On the other hand, demand and then the price for flour and fodder in Uzbekistan, Tajikistan and Afghanistan also dropped, which was more painful for Kazakhstani exporters, Abdumanapov said.
«In this regard, they offer a cheap price as well. Because of lower logistic costs, they offer $220 to $225 per ton under the condition that the wheat is delivered to the Saryagash railway station and then to the Tashkent conjunction. We think this is too low and ask $230 to $235 per ton,» he said.
The harvesting season hasn’t started yet in Kazakhstan, so local grain producers can still keep their cereals in storage facilities for a month or a month and a half while waiting for better price offers, the head of KazGrain said.
Official statistics show that in 2022 Uzbekistan imported from Kazakhstan three million tons of wheat or 47.1% out of the entire amount of exported Kazakhstani wheat, Tajikistan – 986,700 tons (15.5%), and Afghanistan – 686,700 tons (10.8%). Since Kazakhstan doesn’t share a border with Tajikistan and Afghanistan, all those exports go through Uzbekistan. The 75-kilometer-long railway from Hairaton to Mazar-e-Sharif is the main way for such exports from Uzbekistan to Afghanistan.
Grain prices surged in the global market after the Russian invasion of Ukraine, which are both key grain exporters in the region. However, when Russia reported a record-high yield of wheat in 2022, prices went down.
Another factor that helped to cool down the market was the Black Sea grain deal, an agreement between Russia, Ukraine and Turkey brokered by the UN. The deal allowed the export of Ukrainian grain across the Black Sea. In return, Russia was meant to freely export its food products and fertilizers to the global market.
On July 17, the Russian Foreign Ministry announced that the country won’t extend the deal. As a result, these international arrangements no longer exist. However, the ministry noted that Russia is ready to reconsider its decision once all restrictions on its agricultural exports will be lifted.
Every year, Kazakhstan exports about seven million tons of flour and grain. This year, Kazakhstani grain producers are planning to boost the export of flour and grain to nine million tons, Kursiv reports.
