Transit constraints weaken Kazakh grain against cheaper Russian supply
Kazakh grain exporters face stronger Russian competition in Central Asia and Iran as a firm tenge and restricted transit raise costs. China offers growth, but limited transport capacity constrains shipments, while blocked routes to Baltic and Black Sea ports threaten sales to Europe and other distant markets.
Russian grain gains a price advantage
As Kazakhstan completes its 2026 harvest, selling the crop at viable prices has become the central challenge for farmers and traders. Erbol Yeleulov, chief executive of international grain trader Fergus, told ElDala.kz that Russian agricultural products are moving into Central Asian markets because of difficulties exporting through Black Sea ports.
Kazakhstan is expected to retain a presence in Uzbekistan, Tajikistan and Afghanistan, but Russian wheat can compete through lower prices. Yeleulov said it often has weaker baking characteristics than Kazakh grain, including problems with the gluten deformation index. Millers can nevertheless blend it with Kazakh wheat as an improver to produce flour with acceptable specifications.
Russia also benefits from higher yields associated with more favorable rainfall and from currency movements. The tenge strengthened by 20%, from about 540 per $1 a year earlier to 440 per $1 at the beginning of October. Over the same period, the ruble weakened from 75 to 85 per $1. According to Yeleulov, these factors allow Russian wheat to reach Uzbekistan at $20 per tonne below Kazakh supply, even after delivery costs.
Iranian and European outlets come under pressure
Kazakhstan is also losing ground in the Caspian market. Its barley would traditionally already be moving to Iran at this point in the season, but Yeleulov said shipments are currently absent. Russian ports including Astrakhan and Makhachkala, alongside river ports in Samara, Saratov, Tolyatti and Kazan, are loading barley for Iran, as well as smaller volumes of wheat. Corn shipments are expected to follow.
Access to more distant destinations is even more difficult. Kazakh grain cannot reach the world market through Russian Black Sea ports this year, while Georgian ports are expensive and have limited capacity. Baltic routes are also constrained because rail transit across Russia is effectively closed as Russian operators prioritize their own harvest. Plans by Kazakh exporters to move cargo through Russia toward Estonian ports in October were rejected because capacity was unavailable.
The restriction threatens potential sales of Kazakhstan’s high-protein wheat to Europe. It also affects durum wheat: Italy imports 500,000 tonnes per month, but Yeleulov warned that Canada, Turkey and other suppliers could take the market space available to Kazakhstan if Russian transit remains closed.
China offers demand but infrastructure sets the limit
China remains a comparatively stable premium market where Kazakhstan has a logistical advantage. Kazakh barley is shipped there in containers and grain wagons, while deliveries of feed flour continue to grow. Annual shipments began at 1 million tonnes and have reached 3.5-4 million tonnes, a level Yeleulov said is still below the market’s potential. The binding constraint is transport infrastructure capacity.
Exporters are seeking government action on transport subsidies and value-added tax refunds. Subsidies introduced two years ago helped Kazakhstan reach Algeria, Tunisia, Morocco and Mauritania, but the state has accumulated substantial unpaid obligations to traders for completed shipments. Exporters want those debts cleared and a predictable payment mechanism. Changes to VAT procedures introduced at the start of 2026 have also led many exporters to stop applying for refunds, although the industry hopes the system will be revised in 2027. Yeleulov said resolving these issues could lift domestic wheat prices from the current 80,000-90,000 tenge per tonne to 100,000, 110,000 or even 120,000 tenge.
