Wheat prices on the domestic market in Kazakhstan remained stable last week. However, there was a significant increase in export prices for wheat sold to Central Asian countries, according to Evgeniy Karabanov, Head of the Analytics Department of the Grain Union of Kazakhstan.
For shipments to the Saryagash International Airport, the largest price increase, by $6 per ton, was for grades 4 and 5 wheat: $197-202 and $190-194, respectively.
Grade 3 wheat with 28-29% gluten increased by $5 per ton to $280-285 per ton. The price of grade 3 wheat with 23-24% gluten increased by $4 ($212-217 per ton) and with 25-26% gluten increased by $217-222 per ton.
The price of 3rd-grade wheat with 27% gluten (258-262 USD) and hi-pro (293-298 USD/ton) increased by $3.
According to Evgeny Karabanov, the increase in export prices is observed against the backdrop of a significant strengthening of the tenge against the US dollar and other currencies. The price of grain was also impacted by increased transportation costs for wagon fleet owners and operators. Wagon turnover remains low due to the congestion of the KTZ network and Central Asian countries.
"Current demand for wheat is constrained by the capacity of railways in both Kazakhstan and neighboring countries. This leads to higher logistics costs and, together with the strengthening tenge, to higher export prices for wheat and wheat flour to Central Asian countries," concluded Evgeny Karabanov.
At the same time, KTZ reported that approximately 700,000 tons of Kazakhstani cargo is shipped through the Saryagash international crossing monthly. The seasonal increase in grain transportation is increasing the load on the border infrastructure.
"The beginning of the bulk freight season has led to temporary disruptions in freight traffic. A backlog of over 8,400 railcars has been recorded on the approaches to Saryagash station, due to delays in the acceptance of trains by Uzbek Railways. While the agreed daily acceptance rate is 35 trains, the actual figures in September and October were 29 and 31 trains, respectively, and are currently maintained at approximately 29 trains per day," KTZ reported.
This has resulted in the accumulation temporarily of delayed trains. This situation impacts not only exports to Uzbekistan but also shipments to Tajikistan and Afghanistan. Therefore, to prevent infrastructure overload, KTZ imposed loading restrictions on the Saryagash international crossing starting October 25 until actual train acceptance is restored to the agreed volumes.
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