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Kazakhstan's domestic grain market is facing growing instability and pressure, driven by a confluence of factors including fluctuating currency exchange rates, a surge in imports from Russia, and a decline in demand.

Russian Wheat Gains Competitive Edge

According to Yevgeny Karabanov, head of the analytical committee at the Kazakhstan Grain Union, the depreciation of the Russian ruble has made wheat imported from Russia significantly more competitive. This has led to a substantial influx of grain into Kazakhstan via road and rail, intensifying downward pressure on domestic market prices.

Exporter Profitability Dips Amidst Import Rise

The strengthening of the Kazakh tenge, coupled with reduced profit margins for exporters, is hindering price increases for grains and oilseeds. Despite this trend, the price of 4th and 5th grade wheat saw a modest increase of 1,000 tenge per ton last week. This rise was attributed to increased demand from processors, poultry farms, and exporters.

Other Grains and Export Prices Show Mixed Trends

Significant changes were not observed in other grain categories, with many companies fulfilling previous contracts and low exchange activity. Export prices for wheat across 3rd, 4th, and 5th grades saw a minimal increase of $1 per ton, while other positions remained stable.

Barley and Flax Markets Experience Fluctuations

The barley market showed varied movements. Prices decreased by $5 per ton on the DAP Saryagash route, but rose by $5 on the DAP Dostyk and Altynkol routes due to logistical constraints. No new transactions were recorded under the FOB terms at the Aktau port.

The flaxseed market, however, is experiencing price growth. Domestic prices are holding steady at 230,000-240,000 tenge per ton (approximately $477-$497). Export prices under the FCA Kazakhstan terms increased by $5 to reach $515-$520 per ton.

In the European direction, Kazakh flaxseed prices rose by 10 euros per ton to 550-555 euros under DAP Poland terms. Under C&F ARAG terms, prices climbed $10 to $710. On the DAP Dostyk and Altynkol routes, prices increased by $15, reaching $560-$565.

Prices in the Chinese market remain stable, with domestic prices at 4800-5150 yuan per ton and C&F Tianjin port prices between 3850-4200 yuan per ton.

Future Outlook

Analysts link the rise in flaxseed prices to the increasing cost of vegetable oils, influenced by rising oil prices. Currently, rapeseed oil is more expensive than flaxseed oil.

Overall, the market remains uncertain. The continued import of Russian wheat is expected to keep the domestic market supplied with cheaper grain, potentially capping price increases in the near future.

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