PRINTABLE VERSION   EMAIL TO A FRIEND   RSS FEEDS 19:18 UK, 5th Dec 2011, by Agrimoney.com
'Physical' constraints to cap Kazakh grain exports

Kazakhstan highlighted the grain infrastructure limits in the former Soviet Union by saying that its exports would meet only two-thirds of their potential lifted by a record harvest.

Kazakhstan's grain crop this year more than doubled from last year's drought-affected harvest to hit 26m tonnes, the Food Contract Corporation (FCC), the country's state grain trader, said.

While below some other forecasts - Nursultan Nazarbayev, the Kazakh president, two weeks ago pegged the harvest at 29m tonnes – that estimate had raised some eyebrows, following reports that the crop's bunker weight, before cleaning and drying, had reached about 30m tonnes.

And it represented a sharp contrast to last year, when production fell to 12.2m tonnes, with the rebound fostered by conditions described as "nearly ideal" by the US Department of Agriculture, viewed as the world's main farming authority.

Physical constraints

Sabit Kashkimbayev, a senior FCC manager, said, according to the Novosti-Kazakhstan news agency, concurred with a Kazakh farm ministry estimate that the crop created potential export firepower of 15m tonnes.

"But we will not be able to export physically such a volume," he said.

"If we manage to export some 10m tonnes, including flour in grain equivalent, this will not be altogether bad."

While he failed to elucidate on his reasoning, many observers have said that Kazakhstan's shipments will be limited by the costs of transport to foreign-owned Black Sea ports needed to reach big buyers such as Egypt – and competing with strong Russian and Ukrainian supplies even if it gets there.

Indeed, Russian rail bosses last month halted delivery of even domestic grain to the main grains port of Novorossiisk, citing a backlog of crop built up in dock silos.

Kazakhstan's own Aktau port, on the land-locked Caspian Sea, is facing applications for trade well beyond its capacity of about 500,000 tonnes a year.

'Old and inefficient'

The export squeeze threatens to expose another logistical shortfall, in storage, forcing the country to maximise use of its own run-down complement of elevators and silos.

"Officially, storage capacity reaches 28m tonnes, including 13, tonnes on farm, which is sufficient to store all the 2011 production," Agritel's Kiev office said.

"However, such facilities are often old and inefficient, and drying structures are lacking," the consultancy said, noting an estimate from a political spokesperson that the country may lose some 3m tonnes of grain to poor storage.

Kazakhstan, which has leased 5,000 grain wagons from Russia's RusAgroTrans, has boosted its storage space by keeping grain in railcars.

RELATED ARTICLES
Russia's logistical woes deepen Black Earth losses
Black Sea grip on wheat trade to weaken in 2012-13
Russia halts grain trains as ports strain to cope
Kazakh wheat price falls to half world levels
Kazakhs 'using rail trucks' to store huge harvest
LINKS
Agricultural Commodities
Agricultural Markets
Agricultural Companies
Agricultural Events