Kazakhstan Seeks to Boost Grain Exports to Saudi Arabia

Kazakhstan is planning to increase the supply of grain to Saudi Arabia, the press service of the Kazakh Ministry of Agriculture reported recently. The decision was made after representatives of Saudi Arabia suggested at a May business forum that Kazakhstan provide a preferential grain regime to Saudi Arabia.

The suggestion was made by the Chairman of the Council of Chambers of Commerce of Saudi Arabia Abdulrahman al-Zamir, who also noted the high quality of grain produced in Kazakhstan.

“The completion of the new railway line Uzen-Gorgan connecting Kazakhstan, Turkmenistan and Iran makes it possible to increase the volume of grain export transit through the territory of Iran to the Persian Gulf countries, including Saudi Arabia. In case of interest, there is a possibility of delivery of Kazakh grain to the Saudi Arabian market on mutually beneficial terms soon,” noted a Ministry of Agriculture representative, according to LS magazine.

The ministry has also emphasised high transportation costs from Kazakhstan to Saudi Arabia as one of the major problems that hampers the growth of export and trade development. According to the ministry, the average annual wheat production in Saudi Arabia is about 1 million tons. Imports of grain are about 2 million tonnes per year. In addition, the country imports about 8 million tons of barley every year.

The main suppliers of grain to Saudi Arabia are Russia, Ukraine, E.U. countries, Australia and the United States. According to statistics compiled by the LS financial agency, from 2010-2014 Saudi Arabia imported 68,000 tonnes of Kazakh grain costing $10 million.

“We have an agreement with the Minister of Trade and Industry of Saudi Arabia Taufik al-Rabia concerning our cooperation with Saudi businessmen to establish either an Islamic bank or a fund that could finance such projects. Moreover, we have a common partner, the Islamic Development Bank (IDB), which finances different trading operations and investment projects,” concluded the Minister of Investments and Development Asset Issekeshev.

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