Military operations in Iran have halted Kazakh grain exports to that country. This was reported by Yevgeny Karabanov, a representative of the Kazakhstan Grain Union, at the very beginning of hostilities in the Middle East. He stated that supplies were frozen for the short term, while the long-term impact will depend on the duration of the hostilities. The National Exporters Association "KazGrain" spoke to APK News about the developments in Kazakh grain exports to Iran, 10 days after the start of the war.
According to the Association's head, Zeinollah Abdumanapov, some companies are currently continuing shipments to Iran. The difficulties are not caused by the military operations themselves, but by payment issues.
"Exports to Iran fell not because of the war, but before the war. The ports have been empty since January. Currently, the only problem is with payments. However, some companies that have no payment issues are still sending ships," Abdumanapov said.
According to him, freight and service prices have not increased. However, there is congestion on the overland route. Tariffs have increased for railcars and containers.
When asked why exports to Iran had significantly declined even before the military action, Zeinollah Abdumanapov responded: because of the VAT situation and a general decline in demand.
Currently, the main problem with our barley exports to Iran is payment difficulties.
"The payment problem isn't because importers won't pay, but because there are difficulties receiving payments from Iran and companies through Turkey, where conflicts are ongoing. Many of our exporters aren't signing contracts; they're already afraid to sign contracts because of these payments, because payment issues could arise," the head of the Association said.
There are no detailed statistics on shipments to Iran yet, but the problem of declining demand emerged recently.
"Iran primarily buys barley from us. Demand has fallen since January." There was no active demand for barley from Iran in January and February. But some of our exporters say they're shipping, operating at their own risk. Other companies say they've paused for now because they're concerned about payment issues. Payments there are mostly FOB Aktau, meaning you have to purchase the volume, deliver it to the terminal at Aktau port, and from there they charter a vessel, and after the vessel is chartered, payment is made. So, once the vessel is loaded, payment is made. If payment isn't made, the vessel will be idle. And there are all these details... Therefore, some of our shippers have suspended shipments due to payment uncertainty. "When payment is clear and precise, maybe then they'll resume," said Z. Abdumanapov.
As reported, in early February, the National Association of Exporters "KazGrain" released an analytical bulletin reporting a sharp decline in grain and milled product exports in early February.