Russia may need Kazakh barley to supplement poor harvest

December 06. Central Asia Newswire

By Martin Sieff

Russia may need Kazakh barley to supplement poor harvestRussia may have to import several million tons of grain, primarily barley, from Kazakhstan to ensure its people do not go hungry this winter, Russia’s grain production chief admitted Monday.

The web site on Monday quoted Pavel Skurihin, president of Russia’s National Union of Grain Producers, as saying that in 2010, Russia will produce a total of 66.14 million tons of grain of all kinds – nearly 20 million tons below its consumption levels.

A crisis is not imminent, however, as Russian granaries hold a surplus of up to 28.7 million tons of grain from a strong 2009 harvest. However, this year’s harvest was down by 40 percent and could leave Russia with miniscule or zero carry-over reserves going into the 2012 agricultural cycle.

Skurihin said the barley from Kazakhstan, as well as maize from Ukraine, will be essential as feed crops for livestock and necessary to avert a future, longer-lasting shortage of livestock for meat.

In all, Skurihin said, the Russian Federation currently expects to have to buy a combined 5.5 million tons of barley from Kazakhstan and maize from Ukraine.

Though Kazakhstan also experienced a drop in grain production this year as a result of a massive heat wave, the Kazakhs had previously expanded grain production beyond their needs as part of Kazakhstan’s 20-year “2030” development strategy to become a major grain- and meat-exporting nation comparable to Australia , Canada and Argentina.

Kazakhstan also has a population of only 16 million, about 11 percent of Russia’s population. So it has fewer mouths to feed. And even after a 7.7 million ton fall in its grain harvest this year from 22.6 million tons in 2009 to 14.88 million tons in 2010, Kazakhstan still has 7.7 million to 8.8 million tons of grain, including reserves from last year, that it can sell to other nations.

Russia’s announcement confirms the regional importance of the new Kazakhstan-Russia-Belarus customs union as it will ensure Kazakhstan’s exports to Russia will be expedited more quickly and efficiently, and likely at lower prices.

Russia’s turning to Kazakhstan to make up for Russia’s shortfall also confirms that Kazakhstan is emerging as the emergency grain producer of last resort for the 12 former Soviet republics in the Russian-led Commonwealth of Independent States (CIS).

The effect of Kazakhstan’s sales to Russia may be a rise in barley prices that have already risen significantly at Kazakh markets. But that will be a small price to  pay for continued economic and social stability in Russia, the huge and still powerful neighbor next door.