PRINTABLE VERSION   EMAIL TO A FRIEND   RSS FEEDS 08:27 UK, 30th Dec 2009, by Agrimoney.com
Kazakhstan to test West's grip on grain trade

Kazakhstan is to become a growing force in global wheat trade, leading analysts have said, a move which would further weaken the hold of Western exporters.

A customs union with Belarus and Russia, set from July to introduce common trade tariffs and cut border checks, will fuel a "substantial rise" in Kazakh wheat exports by allowing easier access to ports, UkrAgroConsult said.

While there is considerable interest among grain buyers in Kazakh wheat, which tends to be of high quality yet relatively cheap, the difficulty of getting grain from the land-locked country has hindered deals.

However, the customs union "may change trade patterns", the Kiev-based analysis group said in a report, adding that the picture would become clearer after final documents are signed next year.

Egypt protential 

One change may be realise persistent rumours of sales to Egypt, the world's biggest wheat importer.

"Private Egyptian importers show a strong interest in purchases of Kazakh wheat," UkrAgroConsult said.

"The only constraint is logistics."

Russia itself also represents a potentially big buyer of Kazakh grain, for mixing with its own to improve quality, the briefing added, noting reports of "strong demand for big parcels" of Kazakh wheat.

"Although no real bargains have been registered yet, the increasing interest is clear."

Rising Black Sea tide 

The report comes amid growing concern in Australia, Europe and the US over the competitiveness, and quantity, of exports from Black Sea states, a region which includes Russia and Ukraine as well as Kazakhstan.

Russia has dominated recent tenders for Egyptian wheat, to the extent that the port of Novorossiysk was forced to cease temporarily handling grain for other destinations. The two countries are also in talks over a wheat trade agreement.

"Despite an appreciable decline in prices for French wheat, Egypt prefers Russian wheat," UkrAgroConsult said.

US wheat, meanwhile, was "non-competitive", leaving exports on track to hit their lowest for seven-years.