Kazakhstan looks to boost grain exports to China and Iran

By bne IntelliNews April 24, 2014

bne -

 

Kazakhstan aims at raising its share of both the Chinese and Iranian grain markets, a senior official said on April 23, adding that infrastructure to support the bid is now underway to support a strategy that looks to reduce dependence on Russian and Ukrainian ports. 

The two countries are already among the largest importers of Kazakh grain, Nurbek Dairbekov, head of Kazakhstan's state-owned grain trader Food Contract Corporation, told journalists. With Iran set to see imports of Kazakh grain rise from 345,600 tonnes the previous year to 1.2m, Iran will account for 14% of total exports during the 2013-14 marketing year, the official hopes.

Meanwhile, China's should absorb 4% of the grain sold abroad, he added. Supplies to the Asian giant are expected to more than double to 370,000 tonnes during the current marketing year, which runs to June.

"Kazakhstan is finding new niches and diversifying its grain (trade) flow," Dayirbekov claimed, according to Reuters. "That's why we see a decline in exports to the countries of the European Union [and] Turkey."

The targets are dependent on infrastructure projects, both within Kazakhstan and in the region. Central Asia's largest grain producer relies on rail for the bulk of its exports, which is mainly wheat. Aktau, the country's only port on the Caspian Sea, can handle less than 6% of the tonnage it sells. Elsewhere, Kazakhstan relies on grain terminals in Baku, Amirabad, and others based at ports in the Baltic and Azov Seas.

The jump in exports to Iran is thanks to the launch of a rail link between Iran and Kazakhstan via Turkmenistan would help Kazakh grain exports to Iran. "In the recent years Kazakhstan has been diversifying its grain export routes," Dairbekov said. "With a new railway link in place connecting ... Kazakhstan to Iran through Turkmenistan, Kazakhstan can substantially boost grain exports to Iran." Astana now plans to build a grain terminal on the border between Turkmenistan and Iran, he added.

The state grain trader also plans to build grain terminals on the border with China to increase supplies to the Asia-Pacific region. Astana hopes to use China as a route to supply customers in Southeast Asia.

Kazakhstan's revenues from grain exports in 2013 exceeded $1bn, the official added, according to Tengrinews. "For the recent four years the revenues have grown almost 2.5 times. The overall 2013 revenues made up $1.2bn, whereas back in 2009 the figure only stood at $600m," he said.

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