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Agribusiness in Kazakhstan

Swift action by the government of Kazakhstan has protected dairy and livestock producers from the effects of the 2010 drought, which laid waste to much of the country's grain crops. Grain producers, too, have been spared too much pain as prices for their crops have soared. The Russian government's wheat export ban, which will remain in place until July at least, has driven this dynamic. We are expecting plantings of wheat, which could hit US$350 per tonne in mid-Q310, to rise sharply in 2011.

Key Views

- Milk production to rise to 5.33mn tonnes in 2010, up 1.2% year-on-year. Over our 2010- 2015 forecast period, production is expected to increase by 22.0%, driven by ongoing sector commercialisation.
- Milk consumption to grow 22% in Kazakhstan to 2015. Consumption of milk in fluid form is already reasonably high and most dairy sector growth will instead come through increased demand for processed and higher-value dairy goods.
-Looking forward to 2015, all sectors of Kazakhstan's livestock industry are forecast to experience robust growth. Beef to expand by 33.8% over our forecast period, reaching 529,000 tonnes. Poultry to be the livestock outperformer, with output increasing by 44.0% to 2015.
- Grains were severely damaged by the 2010 drought. Wheat to fall 30% for 2010/11, when we expect Kazakhstan to harvest 11.8mn tonnes of wheat. Barley to fall to 1.65mn tonnes, down 36% y-o-y.
- Real GDP growth expected to rise to 4.0% in 2010, rising to 7.6% in 2014.

Industry Developments

We identify camel milk production as having good growth prospects. The Food and Agriculture Organization (FAO) has been heavily promoting the health benefits of camel's milk and it is receiving increasing attention in the media. If the country can entice foreign investment into new production facilities, we could see a rise in production and the development of an export market for Kazakh camel milk.

A Russian ban on wheat exports has been extended until at least July 2011. This is benefiting Kazakh producers, with prices forecast by some analysts to reach US$350 per tonne by spring 2011. This is likely to lead to a significant rise in wheat plantings for 2011/12.

In partnership with US cattle breeders, the country has launched an ambitious plan to improve its bovine genetics. The country is set to receive more than 2,000 Angus and Hereford cows from North Dakota, which has a similarly harsh climate to Kazakhstan. In October the first 170 pregnant cows and heifers were sent by jumbo jet from Fargo, ND, to Astana. The new stock should have a powerful impact on the quality of Kazakhstan beef going forward.

Kazakhstan's livestock producers are successfully weathering the after-effects of the 2010 drought after the government took quick measures to ensure feed supply to farms was not disrupted. A de facto ban on grain exports to all countries except Russia ensured that dairy and livestock farmers were relatively unaffected by the drought.

by S. C.
08 december 2010, World News > Asia

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