Harvest-2023: first conclusions and a sharp drop in wheat quality

World of NAN editorial analyst predicts a 25% drop in the wheat harvest. Yesterday, statistics on availability of cereals and legumes in Kazakhstan as of October 1 appeared. By comparing the change in these data for the month, one can get a rough understanding of how the harvest went in September. Everyone knows that long rains in September significantly and negatively affected the harvest. How bad is it and how the quality of Kazakh grain has changed?

To start with, the stocks of grains and legumes on October 1, 2023 were the second lowest in the last 8 years, amounting to 13.7 million tons. It was worse only in 2019, when there were 12.7 million tons in the warehouses, and last year the same indicator was 18.5 million tons. That is, the fall in stocks for the year reached 26%.

Wheat has been hit hardest, with stocks at 10.6 million tons on October 1 versus last year's 15.1 million tons. Comparing with September 1, we can see that wheat stocks increased by 4.1 million tons, although last year the same indicator was 9.6 million tons. Assuming consumption, exports and imports are unchanged from last year, the total wheat crop by October 1 is still down 5.5 million tons. Although, of course, it should be realized that the result is also affected by the different harvesting area. Whereas last year 98% of the area was reported harvested by the end of September, this year 72% of the area harvested was reported in early October. Using a simple proportion, we can assume that the wheat harvest for the year decreased by about 4.1 million tons or 25%.

But if the quality of wheat is taken into account, the decline in the food wheat crop is much more severe. In September, food wheat stocks increased by 2.6 million tons, although last year the same figure was as much as 8.7 million tons. That is, the decrease in the possible harvest of class wheat is even more significant: 6.1 million tons. Removing the factor of the difference in harvested area, we come to a possible decrease in the yield of class wheat by 5.3 million tons.

But stocks of feed wheat increased by 1.8 million tons, although last year the growth was only 1.1 million tons. Overall, the share of feed wheat rose to 34% from 10% last year. At no time in the past 11 years has the share of feed wheat growth been this high. The average share in the previous 10 years was 11% and now almost a third of the wheat crop has turned out to be of poor quality.

There is also an issue regarding seed wheat stocks and yields. At least in the last 11 years there has never been so little seed wheat in stocks: 405 thousand tons. The potential seed wheat harvest in September was 241 thousand tons, compared to the previous years' average of 547 thousand tons.

In general, the results of the fall campaign so far look worse than the first expectations of the Ministry of Agriculture. At the end of August, the ministry expected a wheat harvest of 13.4 million tons (-18% y/y). Although, judging by the above-mentioned stock figures, the drop will be more significant and will amount to 25%. Incidentally, a few days ago, the EU's Monitoring Agricultural ResourceS reported on the forecast of a drop in the harvest in Kazakhstan just by 25%.

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