Extension of the supplies geography is important for Kazakh grain exports
To date, the joint-stock National Company Food Contract Corporation is the state operator of Kazakhstan on the grain market. The Food Corporation is the agent on the grain state resources management and the managing company of the Single Grain Holding. The company is developing grain domestic and export markets as well.
- What about the start of wheat and barley forward purchasing by the agency under the spring-summer financing?
On April 15, 2014 The Food Contract Corporation started to realize grain and barley forward purchasing by the agency under spring-summer financing at the subjects of agro-industrial complex. The last ones have to guarantee wheat and/or barley supplies by December 1, 2014. The supplies' volumes to be based on the amount of the preliminary payment and purchasing price, set by the corporation. Expected volume of the new crop grain purchasing will depend on the production volume and the grain price on the domestic market.
- The company appropriated 14 bln KZT on the spring-field works. But, according to the President of the Kazakh Farmers' Union, Auezkhan Darinov, the stated funds were not allocated and the agricultural producers face some difficulties with field works realization. Do you plan to speed up the finance allocation?
In the current year the corporation is making wheat and barley forward purchasing in order to support the agricultural producers for spring-field works realization.
As of May 15, 2014 the company had received 1487 applications, under the state program, at the total amount of 10.5 bln tenge. There were financed 963 applications at the amount of 7.2 bln tenge.
The corporation allocates funds on punctual basis as soon as there are guaranties on the forward purchasing realization.
Note, that to date the financing is not provided in the East-Kazakh oblasts due to the guaranties insecurity on the liability execute within the forward purchasing contracts.
At the same time, the corporation starts to purchase grain to the state resources by spring-summer financing on the securities of the Second-tier Bank. Under the stated program there were inflowed three applications at the total amount of 102 mln tenge and signed contracts at the amount of 72 mln tenge.
- What about the realization of the pilot project on the grain exchange trade in cooperation with Kazagromarketing and the Commodity Exchange Eurasian Trade System (ETS)? How do you estimate the results of the tenders? Is it planned to hold the tenders systematically?
Since the July, 2013 within the further development of exchange trade initiated by the Food Corporation there had been started tenders in the regime of double counter anonymous auction at the ETS. On the grain meeting of the Exchange Committee there were considered the propositions on the organization and realization of the grain exchange purchase on the ETS from small- and middle-scale grain producers.
The advantage of the stated decision is the capability to unite small grain volumes in commercial parties, requested by large-scale grain companies and international traders, which propose maximum market prices. At the same time, the stated issue provides trade's openness and competitive pricing owing the trade single conditions for salesmen and buyers as well.
To date the Food Corporation starts to organize the exchange purchase from small- and middle-scale grain producers. Also, the company decided to invite the Kazagromarketing as the network broker.
The results of the tenders estimated positively and they were held on a regular basis.
- What volume of grain has Kazakhstan shipped since the beginning of 2013/14 MY? And how much do you plan to export in the new season?
In the period of July 1, 2013 — May 12, 2014 Kazakhstan exported nearly 8.1 mln tonnes of grain and flour. Till the end of 2013/14 MY the country will reach the export planned target of 9 mln tonnes. In the future season the exports will depend on the spring wheat harvest and the weather during the summer season as well. Along with the annual average rates achievement the exports may be lower, as opposed to the rate of the current season.
- In the next MY Kazakhstan plans to extend wheat sales markets. What is your opinion on the efficiency of the cooperation between Kazakhstan and China, and the countries of the Southeast Asia as well?
Kazakhstan has no access to the sea. So, there are problems with grain supplies on the European, South African and the Middle East markets. Thus, the issues on the supplies geography extension are important for the Kazakh grain exports. The corporation maintains a focus on the promotion of Kazakh grain to China and further transit to the countries of Southeast Asia.
To date the stated issues do not allow to use effectively the potential capabilities of the neighboring Chinese market. Among the primary targets for the exports activation there is the issue on grain terminal building at the Kazakh-Chinese border. Also, it is necessary to regulate the issues on grain transportation and packing in China, that will promote the containers transit while entering the Southeast Asian markets.
The advanced plans for Chinese cooperation are ones on oilseeds production development. Also, there will be prospects for Kazakh high quality wheat exports to the countries of Southeast Asia.
- In 2013 the share of countries-importers of Kazakh wheat with the transshipment in Azov, Black and Baltic Seas decreased to 5% as opposed to 19% in 2009. What is the reason of the stated situation?
There is grain and flour exports annual increase. At the same time, during the few recent years the Kazakh grain exports to the non - CIS countries with transshipment through Black and Azov Sea ports faced a decrease. The stated issue is based on the grain flow diversification in Kazakhstan.
At the same time, Kazakhstan has the capability to supply high quality wheat Hi-Pro at the volume of nearly 1 mln tonnes, which is interesting for European and Turkish markets and is beyond competition with Russian and Ukrainian wheat exports.
- The Food Corporation is planing to build grain terminals in order to enter the Chinese and Southeast Asian markets. Are there any details about the project?
The company plans to realize the investment project “On building and equipping of new and extension, modernization and capital repair of the current grain warehouses” by 2020. At the negotiations it was proposed China to facilitate in searching for potential partner for grain terminal cooperative building at the Kazakh-Chinese boarder. The one-off storage capacity of the stated terminal will total 50 thsd tonnes.
To date, the representatives of the corporation negotiated with few Chinese companies on the project cooperative realization. The results of negotiations will be discussed later.
Interviewed by Evgenia Severina
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