Kazakh flax prices decline on domestic and export markets

Prices for flax seeds in Kazakhstan have continued to decline since the beginning of May. Over the past week, the downward trend persisted both on the domestic market and in several export destinations.

According to Yevgeny Karabanov, head of the Analytics Committee of the Grain Union of Kazakhstan, domestic flax prices on EXW terms decreased by an average of 2,000 tenge per ton over the week, reaching 226,000–231,000 tenge per ton (approximately 480–491 USD/t).

Export quotations on FCA Kazakhstan terms also fell by an average of 2 USD/t to 518–523 USD/t.

At the same time, the price of Kazakh brown flax with 97% purity on DAP Poland terms remained unchanged at 550–555 EUR/t.

On C&F ARAG terms, the price of Kazakh flax continued to decline, falling by 10 USD/t over the week to 670–675 USD/t for June–July shipments. According to the expert, the market is under pressure due to large supply volumes from Kazakhstan and Canada.

On the Chinese market, flax prices have remained unchanged so far, although weak trading activity may lead to further price declines, Yevgeny Karabanov noted.

Domestic prices in China range from 4,700–5,000 CNY/t (692–736 USD/t), while prices on C&F Tianjin port terms stand at 3,750–4,100 CNY/t (552–603 USD/t).

In addition, the price of Kazakh flax on DAP Dostyk/Altynkol terms fell by 5 USD/t over the week to 540–545 USD/t.

According to Yevgeny Karabanov, wheat and barley prices remained largely unchanged over the past week. At the same time, sales volumes from farmers remain low as agricultural producers are focused on sowing operations. The gap between domestic and export wheat prices persists, continuing to put pressure on exports.

It is expected that the increase in Russian Railways transit tariffs toward the Baltic states and Finland, as well as higher Kazakhstan Railways tariffs, will further complicate the market situation.

“Negative factors such as changes in the new Tax Code and the strengthening tenge continue to affect the market. Activity on both domestic and foreign markets remains low. The disparity between domestic and export prices deprives exporters of profitability. Additional uncertainty is created by Russian Railways’ decision to significantly increase transit tariffs toward the Baltic states from June 15, as well as a new application by Kazakhstan Temir Zholy to raise the cost of main railway network services, including grain cargo transportation for export. These factors, together with the seasonal decline in grain market activity, are leading to export stagnation,” Yevgeny Karabanov said.

According to the Analytics Committee of the Grain Union of Kazakhstan, from May 18 to May 24 prices for agricultural products on EXW elevator terms were as follows (tenge/ton including 16% VAT):

• Class 3 wheat (gluten 23–24%) — 96,000–99,000;
• Class 3 wheat (gluten 25–26%) — 97,000–101,000;
• Class 3 wheat (gluten 27%) — 104,000–107,000;
• Class 3 wheat (gluten 28–29%) — 110,000–114,000;
• Class 3 wheat (gluten 30+) — 120,000–124,000;
• Class 4 wheat — 95,000–97,000;
• Class 5 wheat — 93,000–95,000;
• Feed barley — 90,000–93,000;
• Flax seeds — 226,000–231,000.

Export prices (USD/ton):

• Class 3 wheat (gluten 23–24%) — 269–273 DAP Saryagash;
• Class 3 wheat (gluten 25–26%) — 273–277 DAP Saryagash;
• Class 3 wheat (gluten 27%) — 276–281 DAP Saryagash;
• Class 3 wheat (gluten 28–29%) — 290–295 DAP Saryagash;
• Class 3 wheat (gluten 30+) — 305–310;
• Class 4 wheat — 261–265 DAP Saryagash;
• Class 5 wheat — 256–260 DAP Saryagash;
• Barley — 230–235 DAP Saryagash;
• Barley — 255–260 FOB Aktau;
• Barley — 235–238 DAP Dostyk/Altynkol;
• Flax seeds — 518–523 FCA shipping station;
• Wheat-barley feed mixture (feed flour, protein 12+%) — 270–275 DAP Alashankou/Khorgos.