Kazakhstan wheat prices hit critical levels

International Business News  – According to the Kazakh Agricultural Network, according to Kazakh standards, only by setting a record for wheat yield per unit area can the cost of grain in Kazakhstan be on par with Russia. However, the harvest of most farmers in Kazakhstan who grow wheat does not have much competitiveness compared to Russia’s growing wheat production. Pavel Lushak, the director of Naidorovskoye Limited, issued a warning regarding this.

The farm, which cultivates 20,000 hectares of land in Karaganda, is able to produce high yields, even in extremely dry years, thanks to advanced agricultural techniques. Mainly European soft and durum wheat is grown here, and the best harvest last season was the soft spring wheat variety ‘Taimas’, which produced 10% more than its foreign rivals.

In Kazakhstan, however, only a small percentage of farmers are able to reap such harvests.

Most farmers have modest harvests, which didn’t matter much in the past, but now that agricultural prices have fallen to a critical point, the situation is a little more serious. At present, Russian barley is 36,000-40,000 tenge/ton, wheat is 53,000-60,000 tenge/ton, and it is not expected to rise in the near future.

In Kazakhstan, wheat prices remain high at 90,000 tenge per ton. The devaluation of the ruble, the reduction of Russian grain export tariffs, and the unification of railway tariffs between the two countries will soon lead buyers in Central Asia and China to switch to cheaper Russian agricultural products. This will lead to lower grain prices in Kazakhstan, which will be on a par with Russian grain prices.

As a result, Kazakh farmers need to consistently produce high wheat yields in order to be competitive.

In the case of rising prices of all means of production, the investment in wheat in Kazakhstan this season will reach 100,000 tenge or more per hectare. To recoup their costs, farmers need higher yields.

Pavel Luschak does not expect the problem to be resolved in the short term, with overproduction in Russia and Kazakhstan putting pressure on prices over the next two to three years, and farmers only getting help by reducing the cost of means of production.

At the same time, Pavel Lushchak believes that reducing the wages of agronomists is not desirable, and instead he calls for attracting competent agronomists to farms in this case to help farmers increase productivity and reduce production costs.