Kazakhstan — features of 2018 and anticipations of 2019
2018 was rather successful year for the development of the agricultural sectors of Kazakhstan: the country continued to enhance the back-up of the area, some development programs have been launched for the sectors of agro-industrial complex by 2027, and the digitalization of the area is being picking up. But in Kazakhstan not only domestic market develops but also the foreign trade — the globally important evens such as the mutual trade restrictions between the USA and China, the launch of the import taxes on pulses in India, influenced the export activity of Kazakhstan. In order to sum up the results of the previous year and to know what affected the grain and oilseeds markets, APK-Inform Agency asked several questions the representatives of the agribusiness in Kazakhstan referring to the results of the year and the main gains and changes of the companies.
We asked short questions:
1. What main global and domestic events in 2018 could You mark that influenced the development of the Kazakh agrarian market?
2. Speaking of reforms and agribusiness in Kazakhstan, what were the fundamental changes in 2018, and what should be done more by the government for further development of the agro-industrial complex?
3. What are the prospects for agricultural development do You see, in particular on the grain and oilseed markets?
4. What achievements of Your company in 2018 would You note? What plans for 2018 did come true?
5. How do You evaluate the results of both grains and oilseeds markets in the first half of 2018/19 MY? To what extent did or did not the expectations and the forecasts realize?
6. What factors stimulating and impeding the development of the grains and oilseeds market in Kazakhstan would You note for several recent years?
7. What patterns of the production and the distribution changes of Kazakh agriproducts would You note? How do You estimate them?
8. In Your opinion, what would stipulate the increase of the agricultural production and expansion of the sales markets? What areas are the most perspective?
9. What goals and tasks do You set for 2019?
Amina Sadzhytova, Deputy CEO of Atameken-Agro JSC
Atameken-Agro JSC produces and trade the crops and livestock products in North Kazakhstan, in particular in North Kazakhstan and Akmola regions. The company operates for more than 15 years. The land bank is more than 430 thud ha. The company produces different grains (soft wheat, hard wheat, barley etc.), oilseeds (flaxseed, rapeseed, mustard, etc.), pulses (lentil, peas, chickpeas, etc.) and feed crops, poultry, breeding cattle (Hereford and Angus).
1. In general all the events in the world and inside the country influence the crop market price. In particular, the prices for barley started to increase due to the rise of the demand from Saudi Arabia and Iran and in some months even exceeded the wheat prices. At the beginning of 2018 the high crop of wheat in Russia in 2017 led to the problems with the exporting of the Kazakh wheat via the Black Sea and Azov Sea ports. The unpredictable actions of the Indian government in terms of import taxes for pulses have dropped the market. The trade restrictions between the US and China led to the higher demand from China on the crops of other countries, including Kazakhstan.
Taking into account the demand and the prices for agriproducts, the companies every year revise the structure of the planting campaign by increasing the planted areas under the crops with the highest demand rate. At the same time, they stick strictly to the crop rotation.
2. In Kazakhstan the government adopted several industry programs in terms of agro-industrial complex, including the development of livestock, seed breeding, poultry by 2027. If the planned issues are to be fulfilled it would be a great impetus for the development of the agro-industrial complex in general. For the further increase of the attractiveness of the agro-industrial complex of the country it is necessary to increase the availability of the rationing systems, to develop the infrastructure (in particular, logistics) to improve the quality of training, phytosanitary and the veterinary safety etc.
3. According to the last report of USDA, the import of wheat especially to Afghanistan and Uzbekistan will increase and this would support the prices. Moreover, the signed agreements on barley and corn with China allow exporting these crops to China.
According to USDA report, the import of rapeseed is to increase significantly with the help of the high demand from China and the EU. It is possible that the planned areas under flaxseed will decrease because in 2018 the areas under the crop amounted to 1 mln ha and we believe that the rices will be decreasing, which will lead to the decline in the profitability of the crops.
4. In 2018, the company launched the systems of the satellite field monitoring, the planing scheme Agroplan, module AgroFact for the monitoring and the control of the agronomic processes, and «Grain balance» for the movement records, storage and processing of the products.
5. Due to the unfavorable weather conditions, the harvesting campaign was difficult and prolonged thus the quality of the crops collected needs to be finished. At the same time, the logistical problems have the negative impact on the export of goods, in particular the lack of the grain cars. Moreover, there are still import taxes on pulses in India that also decrease the possibility of the price rise of these products.
6. The increase of the governmental support and the rise of the global consumption of grains and oilseeds, and also the development of the trade relations with China stimulated the grains and oilseeds markets in Kazakhstan.
The impeding factors were the poor infrastructure, lack of the high qualified specialists, unfavorable wether conditions, poor standards for grains and oilseeds quality, etc.
7. Provided the analysis of the changes in production and distribution of Kazakh agriproducts from year to year, I can point out that the agrarians become more oriented for the production of high-profitable corps, such as flaxseed, rapeseed instead of wheat and this tendency according to our estimations is going to preserve. Also, the export of wheat flour declines due to the decrease of the demand.
8. We believe that the increase of the demand, the price rise and the availability of the transport for the delivery of the products would encourage the widening of the markets of distribution. Moreover, the availability of the quality seeds and the accessibility of the rationing system will also play an important role. The most prospective in our opinion is organic production.
9. The goals and the tasks of the company for 2019 are the continuation of the automatization and the digitalization of the agricultural processes, the obtaining of the seeds for the improvement of quality and volumes of the crops.
Oleg Furnisov, Head of Agricultural laboratory in SGS KAZAKHSTAN LTD, PhD of biology, professor
Darmen Tankybai, Director of the business development in SJC KAZAKHSTAN LTS, economist
1. By the end of 2018, one of the global event on the trade markets was the trade war between China and the US that helped to increase the export of Kazakh grains to the neighboring country (China) that has the limitless market. The inner evens were the increase of the planted area under the oilseeds and as a consequence increase of the production. All these events stimulated the development of the agricultural machines, the creation of the new warehouses.
2. There were no significants changes in the agribusiness during the year. After the active development of the area there are always periods of stability. The further development of the agricultural sector in Kazakhstan is connected with the increase of the investment, the development of the agriculture machinery.
3. The Kazakh agrimarket next year is expected to increase the planted areas under the oilseeds due to high demand of the neighboring countries (China, Iran, Uzbekistan) and the European countries. The high prospects in terms of export in recent years are represented by chickpeas as the demand for the crop is constantly increases in Turkey, Iran and the UAE.
4. One of the achievements of our company and our department in particular, AFL, is the direct participation in the nearly every exportation of hard wheat, durum wheat and chickpeas. Also, I would note the successful and new for us inspections of meals, cakes and seeds of oilseeds and wheat bran with the delivery to China and Iran. All the planned projects have already been sold.
5. During the first half of 2018, Kazakhstan exported grains, oilseeds and pulses of 2017-crop. It should be noted that the weather conditions in 2017 led to the high protein content in grains and the stable quality indicators of oilseeds. The climatic conditions in 2018 led, first of all, to the delay of harvesting, the development of the fungi diseases of crops. Despite the high yield of the crops in Kazakstan the global factors cause some declines of quality and safety. The forecasts of the yield of crops in 2018 have approved mostly. In general, the plans have been achieved.
6. The inner investments for the development of the agro-industrial production was the factor that stimulated the development of the grains and oilseeds markets. This led to the increased of the quality of the seeds, improvement of the agri-machines and as a consequence to the increase of the production of fertilizers and crop protection products. The external factors also increase the demand on the global markets. The Kazakh grain has always been of high demand in European countries due to the high protein and gluten content. Other countries are also highly interested in Kazakh grain and oilseeds. At the same time, we do not have our own ecologically adapted seeds materials and this limits the development of the industry.
7. We should note the next pattern - the widening of the channels of distribution of Kazakh agriproducts from neighbors (Russia, Tajikistan, Uzbekistan) to more far countries (Europe, China, Iran, the UAE, Vietnam, Iraq and others). The geography of the deliveries of grains and oilseeds and the products of processing always widens. It should be noted that the unique soil and climatic conditions in Kazakhstan allow receiving high quality crops for further processing.
8. Where there’s demand there’s supply. This phrase is perfectly referred to the agriproducts. China has a high demand for a wide range of agriproducts - the raw materials and the products of processing, especially for edible oils. In recent years, Kazakhstan develops the production of semolina, so in general the progress of the country is obvious. We see the prospects in the development of the domestic processing industry. Also, we would point out the organic production.
9. The main goals for us are the widening of the services that we provide. SGS for many years of work in different parts of the world has received the huge experience in agricultural industry. So, we can carry out the inspection of every stage of the production with high quality.
In Kazakhstan among the traditional inspection services of grains, oilseeds and other crops we can also perform an analysis of soil. This course can help many Kazakh agrarians and producers to understand better the condition of the soil before the planting and to plan future expenditures. This is an element of the accurate cropping, which is a common practice in many countries.
Interviewed by Anna Lysenko, APK-Inform Agency
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