Wheat prices remain stable amid declining export activity

In Kazakhstan, export activity in the grain market is declining amid the strengthening of the national currency. At the same time, price conditions remain relatively stable in both domestic and export markets. This was reported by Yevgeny Karabanov, Head of the Analytical Committee of the Grain Union of Kazakhstan.

According to him, grain shipment volumes remain low. The main reason is the persistent gap between domestic and export prices caused by the strengthening of the tenge. Under these conditions, exporters are not rushing to заключать new contracts, while buyers are unwilling to accept higher prices. At the same time, domestic agricultural producers are not inclined to reduce prices in the local market.

According to the Grain Union, export prices for most wheat grades remained largely unchanged over the past week. An exception was Grade 4 wheat on a DAP Saryagash basis, which increased by $2 to $257–261 per ton, and Grade 5 wheat, which rose by $1 to $251–256 per ton. Meanwhile, export prices for barley in the DAP Saryagash direction decreased by $5 to $235–240 per ton due to seasonal weakening of demand. Barley prices on FOB Aktau and DAP Dostyk/Altynkol routes remained unchanged at $255–260 and $235–238 per ton respectively.

On the domestic market, demand for wheat also remained subdued. Additional pressure comes from reduced demand from feed flour producers. This is due to the fact that a significant number of companies that previously exported to China have not yet received re-accreditation. Currently, 27 companies are accredited, while applications from another 69 are still under review by the Chinese side.

Prices for most wheat categories in the domestic market remained unchanged over the week. At the same time, Grade 3 wheat with 23–24 gluten increased by 1,000 tenge per ton to 93–96 thousand tenge (at elevator, including 16% VAT). Barley also rose by 1,000 tenge to 88–92 thousand tenge per ton, supported by renewed export demand from Iran.

As noted by Yevgeny Karabanov, the strengthening of the tenge combined with declining demand from processors continues to restrain market activity. Grain shipments are decreasing, and the price disparity between domestic and export markets puts additional pressure on market participants. Despite some recovery in the barley segment due to exports to Iran, weak shipments to China and Central Asia do not yet indicate a significant improvement in market activity.