Kazakhstan’s wheat farmers forecast significant price hike
Kazakhstani farmers seek higher wheat prices, targeting $156-$166/ton (31% above current rates). Presently, 3rd-class wheat averages $125/ton, with market prices ranging from $97 to $176 based on quality. Challenges include low profitability and reliance on state purchases, transport subsidies, and Russian crop issues for price recovery. Farmers expect better prices by early 2025.
The acceptable maximum price for wheat from the new harvest for Kazakhstani farmers would be 31% higher than the current 80,000 to 85,000 tenge including VAT (approx. $156 to $166, at an exchange rate of USD1 = KZT511.22) per ton for 3rd class wheat. Currently, the cost of such grain is about $125, said Yevgeny Karabanov, head of the Northern Grain group of companies and a spokesman for the Kazakh Grain Union, in an interview with ElDala.kz.
Market prices for wheat vary depending on quality. Currently, the cost of 3rd class wheat with gluten up to 24% is $117 to $127 per ton, wheat with 25% gluten is $137 per ton and wheat with 27% gluten is $146 per ton. Hi-pro wheat is sold at $176 per ton, while the price of class 4 wheat ranges from $97 to $107.
According to the Kazakh Grain Union, the current wheat crop in Kazakhstan is distributed as follows: 50% of the crop is 3rd-class wheat, about 30% is 4th-class wheat and 10% each is 5th-class, hi-pro and ungraded grain.
Despite differences in crop quality, grain producers across Kazakhstan find themselves in a similarly difficult situation. For instance, Karabanov explains that farmers who harvested 15 centners of high-quality wheat per hectare in dry regions, and those in humid regions who harvested 25 centners of lower-quality grain are experiencing similar financial outcomes.
«Farmers are either working with minimal profitability or forced to sell at a loss to cover current expenses,» the expert said.
Those who can afford to are holding off on selling grain in hopes of higher prices later. Karabanov believes there are prospects for price growth. One factor contributing to this is the situation in Russia, where problems with sowing winter crops may worsen harvest forecasts, which could affect Kazakhstan’s market.
Additional support for prices will come from the direct purchase of wheat by the Food Contract Corporation, a state-owned company that regulates Kazakhstan’s grain market, in the amount of one million tons, as well as from transport subsidies for exports. The expert predicts that by early 2025, wheat prices may reach $156 to $166 per ton, which would be more profitable for farmers and improve their financial situation.
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Source Link : Kursiv Media
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