Kazakhstan Agribusiness Report Q1 2012
- ID: 1991286
- December 2011
- Region: Kazakhstan
- 38 Pages
- Business Monitor International
BMI View: The Kazakh government's support to the country's agricultural industries underpins our positive outlook for grains, dairy and livestock. On grains, we expect the 2011/12 bumper crop to supply significantly global markets and even if we do not expect a repeat of this record output in 2012/13, we believe the country's grains production will remain strong over our forecast period. On dairy and livestock, we see the number of large farms and processing plants increasing, and the commercialisation of the sector continuing, enabling the country to become more and more self-sufficient.
- Wheat production growth to 2015/16: 88.0% to 18.2mn tonnes. This will be mainly due to base effects, as well as increased area planted on the back of significant government support.
- Milk consumption growth to 2016: 41.0% to 499,400 tonnes. This will come as we are positive about the government's recent plan for the development of large-scale modern dairy farms and its significant investment in machinery for these farms.
- Poultry production growth to 2015/16: 54.7% to 165,200 tonnes. This will come as we believe this subsector will be the biggest recipient of investment; not only is growth coming from a lower base, but the segment also represents Kazakhstan's largest meat import dependency.
- 2012 real GDP growth: 6.0%, down from 6.9% in 2011. Predicted to average 6.6% from 2011 to 2016.
- 2012 consumer price inflation: 7.3% y-o-y, down from 8.5% y-o-y in 2011. Predicted to average 7.3% from 2011 to 2016.
We have revised up our forecast for Kazakstan's 2011/12 wheat production in line with official estimates. In fact, we project the country's wheat production to increase 87.0% to 18.1mn tonnes in 2011/12 on ideal weather conditions boosting yields to 1.38 tonnes/ha, compared to 0.67tonnes/ha in 2010/11. Also, increased support from the Kazakh government in the form of subsidies, cheap credit to buy machinery and fertilizers, as well as lower land leasing rates have encouraged farmers to increase wheat production. This should help the crop significantly rebound from 2010/11 drought affected levels, when the wheat crop reached only 9.7mn tonnes.
In 2011, Kazakhstan was hit by at least three foot and mouth outbreaks, showing that the disease continues to pose a serious risk to the country's dairy and beef industries. Hundreds of animals were destroyed in moves to prevent the spread of disease. While all three outbreaks were contained, there remains the possibility of a wider epidemic and we see this as posing downside risk to our forecasts through our outlook period.
Kazakhstan's poultry imports should be subdued in 2011/12 thanks to the implementation of investment programs to finance high-tech projects in the sector. In fact, the USDA forecasts the country's poultry imports to stay at 110,000 tonnes in 2011/12. This is because KazAgro, the government's main agricultural financing entity, launched new poultry complexes equipped with the latest technology and a full production cycle. These will increase production capacity and cost around US$100.8mn.
Business Monitor International's Kazakhstan Agribusiness service provides proprietary medium term price forecasts for key commodities, including corn, wheat, rice, sugar, cocoa, coffee, soy and milk; in addition to newly-researched competitive intelligence on leading agribusiness producers, traders and suppliers; in-depth analysis of latest industry developments; and essential industry context on Kazakhstan's agribusiness service. SHOW LESS READ MORE >
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