This season, Kazakhstani grade 4 wheat has almost caught up with barley in price. Although there is usually a significant difference in price between flour grain and feed.
Currently, farmers are asking 55-60 thousand tenge (including VAT) for a ton of grade 4 on the domestic market of Kazakhstan. They are also asking up to 60 thousand tenge for a ton of barley.
For comparison, a ton of grade 3 wheat costs 65 thousand tenge (including VAT).
The reason is that this season, demand for wheat is only generated by Central Asia. Currently, Uzbek buyers are offering $155 for a ton of grade 4 wheat. Taking into account logistics costs, traders work with minimal profitability, or even counting on a VAT refund.
At the same time, barley is sold to two more interesting and solvent markets - China and Iran. And due to competition between buyers, the export price for feed is higher. Thus, Iranian buyers are offering $170 (FOB) per ton of barley in the port of Aktau.
Thus, the resumption of deliveries to China may support wheat prices in Kazakhstan. Since autumn of this year, they have been limited as a result of decisions by the Chinese customs service. There is hope on the Kazakhstan market that deliveries will resume after the New Year. If this happens, the price of wheat may move up.
Meanwhile, world wheat prices are falling. Over the week, the March futures on the US exchange fell from $5.6 to $5.3 per bushel (from $206 to $195 per ton).