Kazakhstan To Triple Wheat Exports To China As Beijing Looks Away From US Farmers

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Op/Ed by Chris Devonshire-Ellis

US Farmers May Not Get The China Market Back Again

The Kazakh President, Kassym-Jomart Tokayev was in Beijing for talks with Chinese leader Xi Jinping last week, at which the two leaders pledged to strengthen relations further towards what was, possibly euphemistically, described as a “permanent comprehensive strategic partnership”. After their meeting, Tokayev said: “We believe that China’s success is a serious basis for the development of cooperation between our states.”

Chinese investments in infrastructure, business and the oil and gas sector prop up the Kazakh economy. This has been further amplified by investments through China’s Belt and Road Initiative and growing demand for oil and wheat. On the agricultural side, Tokayev stated that Kazakhstan was ready to triple its exports of wheat to China, a sign that Beijing is casting around for alternative suppliers following the US-China trade war. “Last year (Kazakh) grain exports to China reached 550,000 tonnes.” Tokayev’s office quoted him as saying at a meeting of a Chinese-Kazakh business council in Beijing. “We could increase these volumes to 2 million tonnes.”

Kazakhstan traditionally exports most of its grains to neighbouring Central Asian countries, Afghanistan, the Caucasus and further west through the Black Sea ports.

Russia, the world’s largest wheat exporter, expects China to open its market for imports of wheat produced across all regions of Russia within a year, its agriculture ministry said last week, while Moscow has already been ramping up wheat production and harvest quotas to meet increased China demand.

The developments are bad news for US President Donald Trump, whose main voter base lies within the US farming industry, which is already being bailed out by US tax payers in the form of grants following Chinese imposition of tariffs on US wheat imports, which is turn lead to Chinese buyers looking at alternative markets. Furthermore, Russia and Kazakhstan both share significant borders with China, making the export of agricultural products less expensive and faster than US imports.

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Silk Road Briefing is written by Dezan Shira & Associates. The firm assists foreign investors and advises Governments throughout Asia in facilitating trade and investment into the region, and maintains 28 offices throughout China, India, ASEAN and Russia. We also provide Belt & Road advisory and intelligence services. Please email us at silkroad@dezshira.com for enquiries or visit us at www.dezshira.com

 

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