Reference Date: 13-January-2013
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FOOD SECURITY SNAPSHOT
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Cereal production halved from last year’s record level
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Wheat available for export for 2012/13 marketing year (July/June) faces logistical problems
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Prices of wheat increased significantly over the last three months of 2012
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Cereal production halved from last year’s record level
Kazakhstan is the most important producer of cereals (mainly wheat) in Central Asia and the bulk of the crop is spring sown in April and May. The total area planted under wheat (representing over 85 percent of total cereal production) has been officially reported as having decreased by 300 000 hectares, slightly down on last year’s level. The government policy to diversify production of major crops will support the planting of forage crops at the expense of wheat. Less wheat being planted combined with lower returns on average yields and unfavourable weather conditions resulted in a significantly reduced output this season, estimated at half the record level of last season, or some 10.8 million tonnes. Spring crops account for over 95 percent of all cereals produced by the country.
Wheat available for export for 2012/13 marketing year (July/June) faces logistical problems
Kazakhstan is a main exporter of cereals (mainly wheat) and plays an important role in the food security of the sub-region. The bulk of cereals are traditionally exported to Afghanistan, Iran, Turkey, and to countries 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 forecast to be some 7 million tonnes thanks to ample stocks after last years’ bumper harvest. The amount 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 more 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, more than doubling levels seen earlier in 2012. Increased export prices have also 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 population.