Kazakh wheat may help ease Ukraine shortage

Kazakhstan is prepared to fill gaps in grain supply left by severe drought in Ukraine and Russia, provided its own crop does not fall victim to unstable weather conditions, an industry official said on Monday.
The Central Asian country will start new-crop wheat exports from October. Interest is high after it tripled exports this season on a bumper crop, said Daulet Uvashev, foreign economic director of the state-owned Food Contract Corporation.
In an interview with Reuters, he said port operators in Ukraine - where the government has prolonged export quotas that last year caused traders over $100 million in losses - had already expressed interest in Kazakh wheat.
"There is interest among those with elevators in Ukrainian ports. They're prepared to give us the opportunity to transit Black Sea ports en route to all countries: Egypt, Morocco, India, Bangladesh," Uvashev said.
"This will become a real possibility this year - provided, of course, the harvest in Kazakhstan meets forecasts." Ukraine, which can export more than 25 million tonnes of grain per year through its 22 sea ports, might have at least 10 million tonnes of free loading capacity next season due to the export limits imposed by the government, traders said.
Kazakhstan's Agriculture Ministry has forecast a 2007 grain crop of 14.5 million tonnes. While this is below last year's bumper harvest of 16.5 million tonnes, it is higher than the 13.8 million tonnes harvested two years ago. The US Agriculture Department on June 7 forecast Kazakh wheat production in 2007/08 at 12 million tonnes, down 1.5 million tonnes from the prior crop.
"The world's weather today is unstable. One minute there's a drought, the next there's a hurricane. This all means you need to be careful when making predictions," Uvashev said.
Kazakhstan finished its spring sowing campaign this month and expects weather conditions to be favourable for growing in June and July. Harvesting occurs in September.
PORT EXPANSION Kazakhstan, a country five times the size of France, aims to become one of the world's top five grain exporters in the next few years after ranking seventh or eighth in recent years. But it is hampered by the vast distances between farms and ports.
Rail delivery of Kazakh grain to Ukrainian Black Sea ports costs from between $45 and $63 per tonne, depending on the point of departure in Kazakhstan, Ukrainian traders said.
From Kustanai in northern Kazakhstan, it will cost $45 and take 18-19 days to reach port. From Ust-Kamenogorsk in the country's east, it would cost up to $63 per tonne and reach ports in 25-28 days. Deliveries to the Russian port of Novorossiisk would cost $38-53 per tonne and take from 16 to 25 days, they said.
Separately, Uvashev said Kazakhstan will have completed an expansion of its Aktau port on the Caspian Sea by September, doubling grains capacity to 600,000 tonnes.
From Aktau, Kazakhstan will ship grains to Azerbaijan and Iran. The Food Contract Corp shipped its first 1,635 tonnes of grain to its new terminal in the Azeri capital of Baku in April and plans another 5,000 tonnes by the end of the year. "From 2008, we plan to increase our shipments to Baku to 10,000 tonnes every month," Uvashev said.