Kazakhstani exporters are lowering prices to maximize the rate of grain shipments abroad before the expected increase in railway tariffs. Amid cautious demand from importers, the price of all types of Kazakh wheat has fallen under pressure from cheap Russian supply, according to the APK News agency.
According to analyst Evgeny Karabanov's weekly review of the price situation on the Kazakhstan grain market from August 24 to 30, released today, the rate of grain export shipments is accelerating.
"Logistics costs have increased by 10-15% (USD 3.5-5.5/t). After September 10, due to the expected new tariffs for mainline railway services, the tariff is expected to increase by USD 3-4/t.
Importers are cautious about purchasing large volumes of grain, expecting further price declines, and are hoping to purchase cheaper wheat from Russia," the Union's review states.
In this regard, export prices for all types of wheat are under pressure from cheaper Russian wheat.
"The reasons for the decline in wheat prices are increased supplies of new-crop Kazakh grain and cheaper supplies of Russian wheat," E. Karabanov stated.
He also emphasized that due to a good Russian wheat harvest in the south and the Volga region, the effective blockade of ports on the Black and Azov Seas, and the weakening ruble, wheat prices in Russia continue to fall. Supply of imported Russian wheat is increasing, both in Kazakhstan and in Central Asian markets. Prices are being quoted that are 10-15 USD/t lower than for Kazakh wheat of similar quality. Wheat from Russia is supplied to both Kazakhstan and Central Asian countries.
The decline in wheat prices led to a decrease of USD 5/t for first-grade wheat flour on the Saryagash DAP and USD 3/t for feed flour on the Dostyk/Altynkol DAP.
Barley export prices remained unchanged for all destinations. Barley export activity remains low, despite ample supply. Amid a growing fleet shortage, freight from Aktau to Iran's northern ports increased again this week by USD 17/t, to USD 55/t, and from Astrakhan by USD 19/t, to USD 81/t.
Summing up, E. Karabanov noted:
The supply of grains and oilseeds on the domestic market is increasing. Pricing for the new harvest of grains and oilseeds continues to develop on both domestic and foreign markets. Amid restrictions on wheat exports to Russia due to the effective blockade of ports on the Black and Azov Seas, wheat prices in Russia continue to decline. Consequently, offers for imported Russian wheat to Kazakhstan and Central Asian countries are increasing. The continued depreciation of the ruble makes Russian wheat prices attractive to importers from these countries.
Export prices, USD/ton, are as follows:
▪Wheat 3 class (23-24% class) - 247 - 251 DAP Saryagash (-3)
▪Wheat 3 class (25-26% class) - 249 - 253 DAP Saryagash (-5)
▪Wheat 3 K (27% K) - 253 - 257 DAP Saryagash (-4)
▪Wheat 3 Kl (28-29% kl.) - 270 - 275 DAP Saryagash (-2)
▪Wheat 3 Kl (kl. 30+) - 281-285 DAP Saryagash (-4)
▪Wheat 4 class - 241 - 245 DAP Saryagash (-2)
▪Wheat 5th cl - 233 - 237 DAP Saryagash (-3)
▪Barley - 185 - 190 - DAP Saryagash (0)
▪Barley - 190 - 195 FOB Aktau (0)
▪Barley - 190 - 195 DAP Dostyk/Altynkol (0)
▪Flaxseed - 450 - 455 FCA - departure station (-10);
▪Flaxseed - 470 - 475 DAP Dostyk/Altynkol (-5)
Wheat flour, delivery terms DAP Saryagash, USD/t:
▪Flour 1 s. - 300 - 305 (-5)
▪Premium flour - 390 - 395 (0)
Feed meal, delivery terms DAP Alashankou / Khorgos, USD/t:
▪Protein 12+% - 242-247 (-3)