Bloomberg News

Wheat Planting in Kazakhstan Threatened as Dryness Persists

February 28, 2012

Dry weather in Kazakhstan, the second-largest wheat exporter in the former Soviet Union, may persist and threaten planting after a record crop.

The country, estimated by the U.S. government to more than double its harvest and raise shipments to an all-time high in 2011-2012, will continue to have dry weather with temperatures warming to above normal in March through May, said Telvent DTN Inc. in a Feb. 26 forecast. Most of the wheat is planted in the spring, according to the United Nations.

“Our lands are not irrigated, we are fully dependent on our continental climate,” Almaz Zaripov, founder and director of closely held exporter Kazakhstan Food Co., said in a Feb. 23 interview. “If there is a drought, the harvest will be small.”

Lower supply from Kazakhstan may curb a 20 percent slump in futures in the past year. Prices plunged as global production and inventories jumped to records and exports climbed to the second-highest in at least five decades. The May-delivery contract rose 0.7 percent to $6.57 a bushel on the Chicago Board of Trade at 7:02 p.m. in Singapore.

“There are many indirect signs that Kazakhstan will have a problematic crop in the next season,” said Dmitry Rylko, general director at the Moscow-based Institute of Agricultural Market Studies, known as IKAR, which tracks grain output in the former Soviet Union. Exports will “most likely” decline in the next season, he said on Feb. 23.

Record Output

Production may surge to a record 22.7 million metric tons in the season ending June, from 9.64 million tons a year earlier when drought hurt crops, the U.S. Department of Agriculture said Feb. 9. Exports may jump by more than half to an all-time high of 8.5 million tons, it said.

“Considering that Kazakhstan is already down on soil moisture, I think planting will quite likely be done with less than desirable soil moisture,” said Bryce Anderson, an agricultural meteorologist, who tracks growing conditions using satellite images from agencies including NASA. The nation may not get enough rain in the next couple of months to replenish it, he said in a Feb. 26 interview.

Planting in 2012 is unlikely to increase because of shortages of elevators, storage and transportation equipment, the UN’s Food and Agriculture Organization said Feb. 13.

While dry winters are not always followed by dry summers in Kazakhstan, that pattern is “not unusual, interspersed with thundery activity,” according to Jim Dale, a senior risk meteorologist at British Weather Services. Dale correctly predicted in April that drier conditions in China would persist through May.

To contact the reporters on this story: Luzi Ann Javier in Singapore at ljavier@bloomberg.net; Yuriy Humber in Tokyo at yhumber@bloomberg.net

To contact the editor responsible for this story: James Poole at jpoole4@bloomberg.net


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