The Grain Union of Kazakhstan published an analysis of the situation on the Kazakh grain market from November 17 to 23, according to APK News.
Speaking about exports, Yevgeny Karabanov, head of the ZSK Analytics Committee, noted: the main news of the week is that KTZ was forced to temporarily restrict the loading of all freight en route to SAZ via the Saryagash railway station from November 22 to 24.
Due to the limited train capacity of the Uzbekistan Railways, overstocking of access roads at destination stations, and an excess of 6,300 cars (25% above normal) on the Uzbek railway network, which in turn impacted the operational situation on the KTZ network. As a result of the aforementioned difficulties, train capacity was limited, resulting in a backlog of over 9,000 cars on the KTZ network, or 3,000 cars above normal.
"This situation arose due to the lack of diversification of transportation routes and the routing of 70% of grain exports to the SAZ via the Saryagash railway station. This is due, among other things, to the lack of funding under the Wheat Export Transportation Cost Subsidy Program, which would have allowed for the diversification of sales markets for Kazakhstani exporters," Union analysts believe.
To resolve issues related to cargo acceptance, a delegation of KTZ employees was sent to Tashkent last week. During the discussion of issues related to UTY train acceptance, ongoing difficulties related to excessive congestion of railcars on the UTY network were raised, including at the following stations: Keles, Ablyk, Sergeli, Yangiyul, Zarafshan, Rakhimova, Chukursay, Akhangaran, Khamza, Yangiyer, Kakir, Dzhambay, Turakurgan, and Bozsu.
Furthermore, the main plans for December have been agreed upon in accordance with the technical capabilities of the UTY infrastructure.
"After the expiration of KTZ Order No. 2922, cargo bound for the SAZ via the Saryagash MGSP will be accepted in accordance with daily technological standards and taking into account the capacity of the access tracks at the destination stations," E. Karabanov stated.
Therefore, all loading on the KTZ network is paralyzed for three days, and GU-12 applications submitted by shippers for approval of transportation plans are rejected.
Partial loading restrictions remain in place towards China.
Wheat export prices remained unchanged last week, despite the continued strengthening of the tenge and restrictions on grain loading to Central Asian countries.
"Current demand for wheat remains constrained by railway capacity. This leads to higher logistics costs and, along with the strengthening tenge, to higher export prices for wheat and wheat flour to Central Asian countries," E. Karabanov stated.
The Union also believes that the expected allocation of funds to subsidize transportation costs for wheat exports to distant markets will lead to an increase in wheat prices, primarily for grades 4 and 5.
Demand for barley from Iran has increased, leading to an increase in domestic and export prices.
Barley export prices have increased sharply:
▪by USD 5/t on DAP Saryagash and DAP Dostyk/Altynkol terms;
▪by USD 10/t on FOB Aktau terms.
Reasons:
active demand from Iran amid declining Russian barley supply and lower freight costs;
tenge appreciation;
higher railway tariffs; and conventional restrictions on China.
Export prices, USD/ton:
▪Wheat 3 class (23-24% class) - 215 - 220 DAP Saryagash (0)
▪Wheat 3 class (25-26% class) - 220 - 225 DAP Saryagash (0)
▪Wheat 3 Cl (27% class) - 260 - 265 DAP Saryagash (0)
▪Wheat 3 Kl (28-29% kL) - 280 - 285 DAP Saryagash (0)
▪Wheat 3 Cl (cl. 30+) - 293-298 (0)
▪Wheat 4 class - 200 - 205 DAP Saryagash (0)
▪Wheat 5th cl - 193-197 DAP Saryagash (0)
▪Barley - 180-185 - DAP Saryagash (+5)
▪Barley - 210-215 FOB - Aktau (+10)
▪Barley - 190-195 DAP Dostyk/Altynkol (+5)
▪Flaxseed - 510-520 FCA - departure station (0)
Wheat flour, delivery terms DAP Saryagash, USD/t:
▪Kazakhstan flour (Atta - Afghan milling) - 240-245 (0)
▪Flour 1 s. - 290 - 300 (+2)
▪Premium flour - 393 - 398 (+1)
Feed meal, delivery terms DAP Alashankou / Altynkol, USD/t:
▪Protein 10-11% - 215-220 (0)
▪Protein 11-12% - 220-225 (0)
▪Protein 12-13% - 225-230 (0).