December 15, 2017 / 11:36 AM / a year ago

INTERVIEW-Kazakhstan lowers grain export outlook as Russia ups sales

ASTANA, Dec 15 (Reuters) - Squeezed out of its traditional markets in Central Asia by Russia’s record grain crop, Kazakhstan has cut its grain export target while aiming to increase sales to China, Deputy Agriculture Minister Nurzhan Altayev told Reuters.

The former Soviet republic has cut grain export forecast for its 2017/18 marketing season to 8 million tonnes from 9 million tonnes, Altayev said. In the previous season, Kazakhstan exported 8.3 million tonnes of grain.

Russia harvested a record 139.8 million tonnes of grain before drying and cleaning this year.

“Russia has an all-time high crop and they are essentially entering all the markets where we used to sell,” Altayev said.

So far this season, which runs from June to July, Kazakhstan has exported 3.9 million tonnes of grain, up from 3.6 million tonnes in the same period last season.

“Our grain usually went to Central Asian and Caspian markets, and they (Russia) are trying to do the same. Therefore, competition is very serious.”

Some relief, he said, would come from higher sales to China. In January-September, Kazakhstan shipped 242,000 tonnes of grain to China, compared with 300,000 in the whole of 2016.


“I think this (Chinese) market will only grow,” Altayev said.

In order to retain a foothold in the traditional markets of neighbouring countries, Altayev said, the ministry would propose expanding grain terminals on the borders.

But a longer-term solution would be diversification, he said. Wheat makes up almost 70 percent of Kazakhstan’s grain crop.

“We should not rely just on wheat which has low value added and for which we have big, serious competitors nearby. We need to explore other niches,” Altayev said.

Kazakh barley exports to Iran, for example have jumped after the latter stopped importing wheat, and the price of barley has matched that of wheat, he said. Barley makes up 15 percent of Kazakhstan’s grain mix.

Altayev said the ministry saw next year’s grain harvest at 22-23 million tonnes compared with this year’s roughly 22 million tonnes.


Events such as lower-than-expected crops or seasons of overproduction such as the current one have left large Kazakh farms saddled with debt they are struggling to repay.

Altayev said the country’s three largest grain companies - Kazexportastyk, Ivolga and Alibi - owed banks a combined $1.5 billion.

“This is a serious issue, but it can be resolved,” he said, adding that the government was working with the companies on “roadmaps” for repayments.

“In theory, one could just up and bankrupt them all at once, but when we see there is a chance to gradually rehabilitate these companies, I think we should do that,” Altayev said. (Writing by Olzhas Auyezov, editing by David Evans)

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