Kazakh flour exporters fear losing world leadership due to the growth of grain exports from the country

May 16. AgriMarket

Kazakh flour exporters fear losing world leadership due to the growth of grain exports from the countryKazakh flour exporters are losing the market, according to news agency website “Kazakh Zerno”. Since August 2010 the fall of flour supplies on foreign markets totaled 500 thsd tonnes of flour. In February 2010 Kazakhstan exported nearly 185 thsd tonnes of flour, a year later – 109 thsd tonnes only. In 2011, experts expect for the beginning of the recession of flour exports, and to date the half of the country’s milling capacities is stopped.

Several factors influenced at the sale rates of Kazakh flour. Firstly, the imposition of the ban on exports of grains and flour in Russia in the summer 2010 led to the growth of prices for Kazakh grains. The countries of the Central Asia and Azerbaijan made contracts with Kazakh traders who increased the maximum cost of grains and flour. But when in early 2011, Russia canceled the ban for flour, the price of Altai flour was almost down 70 USD/t compared to Kazakh flour indices, and the product was even imported to Kazakhstan, flour was successfully sold out. Secondly, foreign buyers started protecting from price expansion of Kazakh flour. For example, in April Uzbekistan increased the excise duties for Kazakh flour to the level of 15%. The third factor is development of the traditional buyers of their own processing facilities: buying grains in any case is cheaper compared to flour buying. Tajikistan and Kyrgyzstan compete with Kazakhstan for the market of Afghanistan, also Pakistan comes on the market. And finally, in the current year Iran will produce 10 mln tonnes of grains, which completely covers the needs, and export trading to the Southeast Asia and Korea is disadvantageous because of high costs of transit through the territory of China.

According to Gazzizy Shohanovoy, Managing Director of the National agency for export and investment KAZNEX INVEST, the absence of the projected balance of production and consumption is the source of the situation. Another reason – the unwillingness to develop the deep processing of grains.

Also, previously the Kazakh authorities “did not notice” offers of the range of major flour producers to impose export duties for wheat with high gluten content, leaving wheat gluten below 25% free for exports. The processors wanted to found the brand of flour from Kazakhstan from two elite varieties with the highest levels of gluten and whiteness, the export of which could be realized by any producer.

In the current year Kazakhstan plans to export 0.9 – 1.1 mln tonnes of flour. During the 1st quarter of 2011 Kazakhstan exported 140 thsd tonnes of flour. The major export destinations – Uzbekistan, Afghanistan, Tajikistan and Kyrgyzstan. Kazakhstan is the world leader of flour export volumes during four recent years, and occupies 19% of the global export market of flour, which is about 11.5 mln tonnes per year. The situation is caused due to the high flour milling properties of Kazakh grains. The annual demand of the country in milling wheat totals 2.681 mln tonnes.

http://www.agrimarket.info/showart.php?id=107666

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