Kazakhstan: Kazakhstan Agriculture Profile

Cereal production halved from last year’s record level

Kazakhstan is a major exporter of cereals (mainly wheat) and plays an significant role in the food security of the sub-region. The bulk of cereals are traditionally exported to Afghanistan, Iran, Turkey, and to nations in Central Asia that have food deficits, such as Azerbaijan, Kyrgyzstan, Tajikistan and Uzbekistan.

In spite of the significantly reduced 2012 harvest, exports of wheat are estimate to be some 7 million tonnes thanks to ample stocks next last years’ bumper harvest. The all to be exported is expected to be a third less than the previous year’s level, which is reflected in reduced cereal production due to drought conditions during the cropping season.

The export potential of the country faces difficulties caused by transportation and infrastructure constraints. Kazakhstan continues to experience logistical problems in getting wheat to export markets. In order to facilitate exports, the Government is providing subsidies for transporting grains to Black Sea and Baltic ports, securing additional grain rail wagons and considering insurance guarantees on agricultural loans. However, these measures have not helped much because transportation costs are high, the quality of transport facilities is low and storage capacities are insufficient to serve the country’s needs.

Prices of wheat increased significantly over the last three months of 2012

Declining wheat export prices in the second half of 2011, which reflected the record harvest, have been climbing again since July 2012. Wheat export prices further strengthened in November, additional than doubling levels seen before in 2012. Increased export prices have as well pushed up domestic prices on wheat flour by limiting the production of so called “social bread” which is needed in remotes area and for vulnerable groups of people.