KAZAKHSTAN TO LIFT WHEAT EXPORT BAN

UNCLAS ASTANA 001531 SENSITIVE SIPDIS ANKARA FOR FAS E.O. 12958: N/A TAGS: EAGR ETRD PGOV PREL EAID KZ SUBJECT: KAZAKHSTAN TO LIFT WHEAT EXPORT BAN ¶1. (SBU) Prime Minister Masimov announced at an August 16 meeting at the Ministry of Agriculture that Kazakhstan would lift its ban on wheat exports, effective September 1. This move was long anticipated. Our government interlocutors had previously emphasized to us on several occasions that the export ban would be removed once the government determined that there would be a successful 2008 wheat harvest. ¶2. (U) Masimov explained at the meeting that the government will take specific measures to ensure adequate domestic supplies of wheat and stable domestic prices on bread. This includes ordering the state-owned Foodstuffs Corporation to spend 18 billion tenge (approximately $150 million) buying up grain for a "stabilization" reserve -- an additional stockpile on top of the regular state grain reserve. Masimov said that in the event adequate domestic wheat supplies and stable domestic bread prices are not maintained, the government will consider re-imposing the export ban. (Comment: As Kazakhstan annually produces far more wheat than it can consume, a renewed export ban would once again only be a temporary measure. End Comment.) ¶3. (U) The government estimates that the 2008 harvest will bring in 17 million tons of wheat -- which is being described as an "average" yield for recent years. (Note: The bumper 2007 harvest brought in a reported 21 million tons. End Note.) Agriculture Minister Kurishbayev said at the August 16 meeting that he expected a significant increase in wheat production in Russia and Ukraine for 2008. He explained that as a result, ports on the Black and Azov seas may be overloaded with Russian and Ukrainian wheat, making it difficult to get Kazakhstani wheat to market through those ports. Masimov responded that with the lifting of the export ban for September 1, Kazakhstani exporters will hopefully be able to utilize the Black and Azov sea ports before the intensive export of Russian and Ukrainian grain commences. ORDWAY