The decline in prices for grades 4 and 5 wheat in Kazakhstan slowed last week, which may indicate the market has bottomed out, according to Yevgeny Karabanov, head of the Analytical Committee of the Kazakhstan Grain Union.
According to the expert, prices for low-quality wheat have been declining for the fourth week in a row. Prices for grade 4 wheat reached 74,000-78,000 tenge per ton, while those for grade 5 wheat reached 64,000-67,000 tenge per ton. Compared to the previous week, the price of these grades decreased by 1,000 tenge per ton.
Overall, Kazakhstan's domestic grain market was stable last week. According to Evgeni Karabanov, prices for grade 3 wheat with gluten grades 23-24 (87-91 thousand tenge/ton) and 25-26 (90-94 thousand tenge/ton), as well as barley (75-79 thousand tenge/ton), decreased by 1,000 tenge.
Prices for grade 3 wheat with gluten grades 27 (108-112 thousand tenge/ton), 28-29 (117-121 thousand tenge/ton), and 30+ (126-129 thousand tenge/ton) remained unchanged.
According to experts, export prices for some wheat grades increased on the Saryagash DAP delivery terms:
Grade 3 wheat with gluten grade 27 (USD 235-240/t) and grades 28-29 (USD 250-255/t) increased by USD 5/t;
Grade 3 wheat with gluten grade 30+ increased by USD 10/t (USD 280-285/t).
The export price for grade 4 wheat on the Saryagash DAP decreased slightly by USD 1/t (USD 184-189/t).
Export prices for grade 3 wheat with gluten grades 23-24 (USD 199-203/t) and 25-26 (USD 210-215/t), as well as grade 5 wheat (USD 175-178/t), remained unchanged.
"The increase in prices for high-quality wheat is due to a shortage of supply in the market, coupled with increased demand from domestic millers and exporters," explained Evgeny Karabanov.
At the same time, barley export prices fell across the board:
at Saryagash International Airport (DAP) – by USD 7-8 per ton, to USD 180-185 per ton;
at FOB Aktau – by USD 5 per ton, to USD 200-205 per ton;
at Dostyk/Altynkol International Airport (DAP) – by USD 4-5 per ton, to USD 187-192 per ton.
The expert attributes the decline to weak demand from Iran and China, as well as higher railway tariffs and freight rates.
The pace of harvesting in the country has slowed again due to precipitation. According to the Ministry of Agriculture, as of September 29, 12 million hectares (74.9% of the total grain and legume crop area) have been harvested, yielding 18.4 million tons of grain with an average yield of 15.3 centners per hectare. More than 1 million tons of oilseeds have also been harvested. Evgeny Karabanov noted that wheat quality is not improving; on the contrary, the share of grades 4 and 5 wheat is increasing.
"Grain yields are above the long-term average, but weather conditions are preventing intensified harvesting, leading to losses in quantity and quality. The price spread between ordinary grade 3 wheat and grades 4 and 5 will be significant, as will the price spread between ordinary grade 3 wheat with a gluten content of 23-24 and a gluten content of 28+. High-quality wheat is in demand on both domestic and foreign markets. Further price increases for high-quality wheat are inevitable," the expert concluded.
In his opinion, due to rising logistics costs and a shortage of high-quality wheat, prices are expected to rise on foreign markets.