Marketing of Kazakhstan grain is an issue that remains acute year after year. There are few traditional buyer countries, transport corridors are not wide enough, and access to new supply routes is difficult for one reason or another. Kanat Kobesov, Chairman of the Board of Directors of the National Association of Exporters KazGrain, told ElDala.kz about the situation of Kazakhstan grain traders in the 2024-2025 agricultural season.
- Every year brings us new challenges, - Kanat Kobesov noted. - If we take the last 5 years as a whole, then every year we have some kind of trigger. This is either logistics, or low grain quality, or a low harvest, or, on the contrary, too high a harvest, as in this season. At the same time, there is still a tendency that we are increasing our export revenue. Yes, and this season there are problems with the acceptance of our grain by one country or another, which is associated with both logistics and payment. But despite everything, we maintain our traditional markets - primarily the countries of Central Asia), plus two growing buyers have appeared in addition to them - China and Iran.
Complex markets of China and Iran
Both China and Iran are difficult markets to work with, but at the same time very capacious and solvent. These countries are interested in various types of Kazakh agricultural products, but in recent years they have been especially active in buying barley. The volumes of deliveries to these countries are increasing, and there are prospects for further growth.
- Five to seven years ago, China bought 300 thousand grain from us per year, and now we have already crossed the bar of 2 million tons per year, - noted Kanat Kobesov. - Iran also buys 1-1.5 million tons of grain from us per year. But in the future, China can consume about 10 million tons of our grain per year through the XUAR alone. And if you take into account our deliveries to Central and Eastern China, the volumes will be even greater. We need to move towards this. It remains for our government agencies to achieve the already signed memorandums, as well as to resolve issues with logistics for the transfer of our wagons to the other side of the border. This work is also underway, sometimes it limps, sometimes it shoots up.
There are purely technical problems with deliveries on both sides of the border. Therefore, we need to work in close contact with Chinese partners. Synchronization of actions is underway, and it needs to be developed.
A separate issue regarding China is the ban on deliveries of wheat there, which has been in place since mid-2024. Everyone is waiting for deliveries to resume. In the future, China could buy about 5 million tons of wheat in Kazakhstan.
- Chinese processors value our wheat very much for its high quality, - noted Kanat Kobesov. - They are interested in purchases. But why it does not go there in large quantities yet is a question that no one can answer unequivocally yet.
As for deliveries to Iran, they are currently mainly carried by sea, through the Caspian Sea. Certain logistics capabilities already exist here, and they are also being developed. But there is a serious issue of payment for the delivered goods - sanctions have been imposed on Iranian banks. We have to look for ways to make payments.
In the future, Iran may also increase purchases of Kazakh grain to 10 million tons per year. After all, the country's population is 100 million people, and the need for food products is very high.
The issue is the cost of Kazakhstan's agricultural products (and therefore the ability to compete with Russian agricultural products) and the development of transport corridors.
Why subsidize wheat exports
As for new sales markets, cost plays an important role here too. Of course, Kazakhstan can ship agricultural products to any point in the world, delivering them by rail to ports on the Baltic or Black Sea. But transportation costs will have to be included in the price of the product, and it will become uncompetitive.
There are two options here - either reduce the cost of agricultural products by increasing crop yields, or introduce state subsidies for transportation costs.
The state is currently considering the possibility of subsidizing the export of 2 million tons of grain in order to remove surpluses from the market, formed by the high harvest of 2024.
- Introducing subsidies for transportation costs is the right decision, - said Kanat Kobesov. - Moreover, Kazakhstan already had such an experience in 2011-2012, when the country also received a record harvest. And this measure worked then. And now the introduction of subsidies would be relevant for shipments primarily to the Baltic ports. The discussion began in August 2024, the rules were adopted in November. A single operator was determined - Food Corporation, which I think is right. But the system has not yet started working. We are waiting. Although, as they say, a spoon is dear to dinner.
According to the expert's forecast, if subsidized exports do go, this will support wheat prices on the domestic market of Kazakhstan, since practically the only buyer now (Central Asia) will have competition. This will allow Kazakhstani traders to negotiate prices with partners more effectively.
Thus, there are buyers for Kazakhstani agricultural products. There are also opportunities to ship them. But the competitiveness of Kazakhstani grain is becoming an increasingly acute problem. The fact is that the harvests in our country are lower than in Russia. And the lower the yield, the higher the cost price. Due to this, Russian grain gets a competitive advantage when exporting.
- So the situation is not simple, - Kanat Kobesov summed up. - There are sales markets, but we need to work to either stay in them or increase our presence. For myself, I have come to the following conclusion - those who change will survive. We cannot stop developing.