Recent years in Kazakhstan have been dry. But besides such an obvious minus as a decrease in yield, the lack of precipitation also had a plus that was not quite noticeable at first glance - a dry autumn. The lack of rain in September allowed farmers to harvest an average, but high-quality grain harvest for several seasons in a row without any particular difficulties. Let us recall that since 2020, the bulk of Kazakhstan’s wheat has been grade 3, plus a good share of grain of grade 2 and even grade 1. Thanks to this, Kazakhstan’s wheat has regained its status as an improver, which is mixed into average Russian or Uzbek grain to improve baking properties.
However, the fall of 2023 turned the situation upside down. The rains that began in the 20s of August smoothly flowed into the first ten days of September. Moreover, bad weather covered the entire grain belt of the country, paralyzing harvesting. Harvesters cannot go into the field; the massive harvest has not yet begun, by the end of the first week of September. Considering that, due to the hot summer, the grains ripened earlier than traditional dates, by now the harvest should have already crossed the equator. However, in the three main breadbaskets of the country (Akmola, Kostanay, North Kazakhstan regions) approximately 1 million hectares were harvested. Another 1 million came from all other regions. That is, 20-25% of the sown areas of Kazakhstan have been harvested. With an average yield of just below 10 c/ha, a little more than 4 million tons of grain were threshed, while a harvest of under 20 million tons is considered good.
No one knows when dry, clear weather will set in (or whether it will set in at all). Meanwhile, the grain is crumbling, and with it preliminary forecasts about the harvest of 14 million tons of wheat crumble into dust. This volume would be comfortable for everyone, and based on such expectations, the Kazakh authorities in early August hastened to extend the current six-month ban on the import of wheat from Russia by road until April 2024. They also decided to limit the import of wheat from the Russian Federation and by rail from October, making an exception only for poultry farms, flour mills and licensed elevators.
Import ban or export ban?
However, if the situation develops according to a negative scenario, the pendulum of market expectations will swing in the other direction - to the need to increase imports.
Flour millers are already saying that any bans on the import of Russian wheat must be lifted. It is becoming clear that Kazakhstan’s own wheat harvest will not only be low, but also of poor quality. The fact is that during two weeks of rain, unharvested grain in the field began to germinate. And not only in windrows after the first stage of separate harvesting, but also standing crops. A surprise came from the craze for European short-stemmed varieties - their ears stand upright and calmly absorb moisture. Whereas in long-stemmed wheat of domestic varieties, the ear droops, and raindrops calmly roll down along the scales.
Sprouted wheat is an unclassy grain that is used only for livestock feed. But even if it did not germinate, the multi-day rains washed the gluten to that level, 4-5 classes. Flour millers definitely do not need such a harvest, which is why they are already raising the issue of lifting restrictions on the import of wheat from Russia.
If this is not done, then we can expect a sharp rise in prices for high-quality grain, of which there will be little in the country. By the way, this trend has already emerged - over the past week, last year’s grain prices soared by 5%, rising above 90 thousand tenge/ton. Some experts, seeing this, propose tightening restrictions on the import of wheat from outside, motivating their proposals with supposed concern for Kazakh farmers. They say it’s hard for them, and we need to give them the opportunity to make money on such an artificial increase in domestic prices.
But here you need to look a step further, and then it will become clear: as soon as the country’s authorities see the risk of rising prices on the domestic market (coupled with the risk of a shortage of food grains), they will immediately introduce a ban on the export of Kazakh wheat. And no one can argue with the logic of this step.
Or, without introducing official measures, the Kazakh authorities will secretly limit shipments to the “hands” of railway workers. By the way, this is already happening now - since the beginning of September, traders and flour millers at the Kazakhstan Temir Zholy company have not agreed on additional plans for the export of grain and flour. Market participants are perplexed and indignant, but if you look at the root, the reasons for these sudden restrictions become clear - most likely, this is how the government insures itself in case of continued bad weather and disruption of the harvest.
So in the current situation, calls for restrictions on the import of Russian grain will most likely lead to the opposite effect.
Are seeds worth their weight in gold?
All that remains is to be patient and hope that the weather will improve and Kazakhstan will reap at least some harvest.
Be that as it may, the current situation has already guaranteed long-term negative consequences that will come back to haunt the country’s farmers next spring. Namely, the provision of seeds. Obviously, sprouted grain is unsuitable as seeds. But that's only half the story. The fact is that if the rains do not stop, then the entire crop will have to be dried. And grain that has passed through the dryer also loses its viability.
So there will be few seeds in the country, and their prices will skyrocket.
What to do? There is only one way out - both the farmers themselves on the scale of their own farms, and the Ministry of Agriculture of the Republic of Kazakhstan on a nationwide scale, need to conduct an audit of the remains of high-quality wheat from last year in warehouses and form a seed fund from it. The volume there is huge, apparently - more than 3 million tons. This is more than enough to provide seeds to all farmers in the country. Moreover, the situation can be turned to the benefit of the industry and a scheme can be developed to provide everyone with high-quality seeds with the support of the state.
Moreover, we need to draw the right conclusions from this year and try to return as large areas as possible to domestic wheat varieties, such as the same “Aina” of the Karabalyk Agricultural Farm, which this season has also shown its strengths such as resistance to shedding and germination.