Kazakhstan may face a shortage of grain and rising prices for it

In the first four months of 2023 (January-April), Kazakhstan exported 2 million 265 thousand tons of wheat, plus 631 thousand tons of flour. That is, in total, 3 million 106 thousand tons were shipped abroad in grain equivalent. This was announced by Alikhan Talgatbek, President of the Union of Grain Processors of Kazakhstan, writes ElDala.kz.

In addition, domestic consumption for the same four months amounted to 1 million 600 thousand tons, the expert noted. - In total, the balance decreased by 4 million 706 thousand tons. At this rate, we may have a shortage of grain. We need to keep an eye on the leftovers.

Recall that as of January 1, 2023, Kazakhstan had a little more than 13 million tons of wheat. Including, 11 million 349 thousand tons of food, 1 million 260 thousand tons of seeds, 452 thousand tons of fodder. It turns out that, minus the retired 4.7 million tons, the balance of food grains at the beginning of May amounted to 6.6 million tons.

There are still four months before the new harvest, and while maintaining the current pace of exports and consumption, the balance of food grains by September 1 should be about 2 million tons. It would seem that this is a comfortable stock. But Alikhan Talgatbek recalls that official statistics are often distorted. Experts in different years estimated the volume of annual postscripts at 2-3 million tons, which were most often made by small farms for the subsequent legalization of contraband grain.

It should be noted that at the beginning of the year, official statistics estimated the stocks of food wheat in peasant and farm enterprises at just 2 million tons.

If this grain really exists only in reports, then Kazakhstan can really come to a new harvest with empty bins, and this will inevitably cause an increase in grain prices in the coming months.

The situation is added to the anxiety by the fact that in April Kazakhstan resumed deliveries of wheat to China by grain carriers, 65,000 tons were exported. The plan for May is already 100 thousand tons. Grain traders of Kazakhstan consider the Chinese direction to be a premium destination and expect to gradually increase exports there to 500-700 thousand tons per month, reducing supplies to the less solvent countries of Central Asia.

In addition, in April, the import of wheat to Kazakhstan from Russia by road was also banned, which cut off small flour millers and poultry farmers from the supply of cheap grain. They were forced to switch to the use of more expensive Kazakh wheat.

However, some experts doubt that the situation will become critical. Still, the supply of wheat from Russia continues by rail, grain from the Russian Federation now enters Kazakhstan at about 90 thousand tenge/ton (including VAT). Kazakh wheat costs about 10% more. And so far, nothing foreshadows a rise in prices - unless the market feels that the elevators are actually empty.