News: Tuesday, July 27, 2010 
Article of the Day
Drought has Some Growers Reeling, but Others OK
By Alla Dubova and Maria Korzheva
Many Western Kazakhstan grain growers are on the verge of bankruptcy from a drought that has affected some areas far worse than others.
The drought not only has reduced this year’s expected grain harvest, it’s also burned up the grass that cattle eat, threatening livestock losses.
Prime Minister Karim Masimov addressed both the grain and cattle situations recently by saying Kazakhs would have enough bread to eat but that the Agriculture Ministry needed to help ranchers save their cattle.
Insurers are adding to grain growers’ problems by refusing to issue crop-loss policies to them, even though the law requires them to do so.
The drought has not hit Kazakhstan as hard as Russia, where it has burned up about a quarter of the grain crop.
The U.S. Department of Agriculture said Kazakhstan has had less rain during this growing season than in any summer in the past 10 years.
That has led to its grain crop being in the worst shape in a decade, said the agency, which issues monthly reports on the international grain situation.
The agency cut its forecast for Kazakhstan's grain crop recently from 16 million tons to 13 million.
The situation has improved a little in Kazakhstan’s northern grain heartland around Kostenay because of some rain this month.
But western Kazakhstan is a crop disaster area because of minuscule rain since April and temperatures that have exceeded 45 degrees Centrigrade.
Losses in the west range from 50 to 90 percent of the grain crop, depending on the farm.
Many growers there are on the verge of bankruptcy.
One reason is that insurers are refusing to issue crop-loss policies to growers in West Kazakhstan Oblast. They are also saying no to growers in Aktobe and Pavlodar Oblasts.
Kazakhstan requires insurers to offer crop-loss coverage, but the losses can be big, so insurers don’t want to write the policies.
And they’ve figured a way around it.
Instead of issuing crop-loss policies, they pay the much smaller fines the government imposes for refusing to write policies.
With no crop insurance, many growers will have to ask banks to postpone their loan repayments to keep from going under.
Although the grain crop will be well below last year’s, agricultural officials have pointed out that the 2009 harvest was a record-breaker. Kazakhstan can’t expect a bumper harvest like 2009’s every year, they said.
Agriculture Minister Akylbek Kurishbayev said the drought situation “cannot be called critical” in much of Kazakhstan
Harvesting has already started in the south and east.
The yield in the south is about average compared with most years, he said, while the yield in the east is better than average.
“And it has started to rain in the northern areas,” suggesting there will be a good yield there, he said.
Thankfully, Kazakhstan’s drought is not nearly as severe as Russia’s, he said.
He said he’s “worried about the fate of two oblasts – West Kazakhstan and Aktobe. Measures to mitigate the consequences of the drought will be taken there.”
The U.S. Department of Agriculture said Kazakhstan’s growing use of a scientific-farming method has prevented the crop loss from being worse.
The technique, low-till planting, involves planting seeds by punching holes in the ground rather than breaking up the entire topsoil.
The low-till method prevents a lot of the moisture in the soil from escaping.
"Grain producers maintain that moisture-saving technology reduces yield loss in the event of drought and reduces the need for clean fallow in the crop rotation," the U.S. agency said.
Kazakhstan growers are using the low-till approach on 10.3 million hectares this year, twice as much as in 2007.
A key consequence of drought can be a jump in bread prices, and government officials are vowing that will not happen.
“Consumers must not feel the problems, and they will not,” Massimov said. “We have enough grain to feed the people.”
The domestic grain demand is about 3.5 million tons, and Kazakhstan has 3.6 million tons in storage from last year’s bumper harvest.
And the Agriculture Ministry is predicting a slightly larger harvest than the U.S. Department of Agriculture is --13.5 million to 14.5 million tons.
"Our reserves are sufficient, and we will not only provide our country with bread, but will also have a very good export potential” after the harvest, he said.
Kazakhstan exported 8 million tons of its 21-million-ton 2009 harvest.
The drought’s threat to livestock worries officials more than the grain situation.
Growers can have a healthy grain crop a year after a drought.
When ranchers have to slaughter a lot of cattle because they lack food for them, however, it can three to four years for the herds to recover.
The grass that ranchers feed their cattle is in its worst shape in 20 years in northern and western Kazakhstan, with the yield being only about 300 kilograms per hectare,
Some varieties of grass are planted in summer, but ranchers are having to delay planting because of lack of rain.
After visiting cattle-growing areas this month, Masimov asked Kurishbayev to come up with a government program to help ranchers.
The prime minister said ranchers who are worried about how they can feed their cattle should refrain from mass slaughtering, which would not hurt the industry for the next several years but also lead to higher beef prices, the Focus business newspaper reports.
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Kazakhstan General
Tourism-Promotion Ideas start with List of Attractions
By Kseniya Mikhailova
Tourism officials inside and outside Kazakhstan have talked for years about the country’s potential to attract visitors.
The problem is that it’s been just
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Comic Maker says Genre has Future in Kazakhstan
By Tatyana Borisova
Comics are considered art in Europe and Japan, but in Kazakhstan they’re seen as frivolous and certainly not a business proposition.
Until this month, the
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Shoddy Border-Post Work is behind Extradition.
The reason that Kazakhstan asked Turkey to return its former drug-fighting czar is that his office awarded construction contracts on six border checkpoints that turned out
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Emirates Leader builds Shymkent Hospital
The charitable foundation of the United Arab Emirates’ ruler has built a 120-bed maternity hospital in Shymkent.
The Khalifa bin Zayed Al Nahyan Hospital includes eight beds
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Oil and Gas Sector
Kazakhstan plans Tanker Ship Increase
By Maria Gordeyeva
Kazakhstan plans to handle half of the Caspian Sea's commodity cargo by 2013 after expanding its fleet of oil tankers with the help of
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Kazakhstan-China Pipeline Volume jumps 46 %
China obtained 4.97 million tons or 46 percent more oil through the Kazakhstan-China pipeline in the first half of 2010 than in the same period in
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Canadian Investors win Case Involving Petrokazakhstan
By Shaun Polczer
A Chinese-government-owned company has settled two unusual lawsuits stemming from its acquisition of a Canadian-owned company focusing on Kazakhstan oil.
The Canadian subsidiary of
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Finance and Investment
With Few Bad Loans, Kazakhstan’s Foreign prosper
By Kadyrzhan Smagulov and Serik Mambetov
International banks are prospering in Kazakhstan, partly because many Kazakhs have shifted their money from domestic banks since the financial
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Foreign Banks’ Numbers High but Capital Low
By Damir Mukhametov
International banks either own or have stakes in 20 of Kazakhstan’s 39 banks, according to Daniyar Akishev, deputy governor of the National Bank
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Moody’s lowers ATF Bank Ratings
Moody's Investors Service has lowered ATF Bank's local and foreign-currency deposit and senior unsecured debt ratings to Ba2 from Ba1.
The downgrade reflects a poorer financial picture
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You can’t bank on Some Cash Machines
By Akkyz Ormanova
Heat-weary Kazakhs are finding their temperature rising even higher over balky cash machines.
Some machines stop working when temperatures exceed 40 degrees Centigrade.
One of
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Metals and Minerals
Modern Coal Mining Operation Launched in Karaganda
By Nina Verbovaya
Saryarka Energy has started mining coal using cutting-edge technology at a site in Karaganda Oblast that was abandoned in the 1970s because of
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Bogatyr Komir’s First-half Coal Sales jump 34%
The joint venture of Kazakhstan’s Samruk-Energo and Russia’s RusAl Bogatyr Komir increased its coal sales by 34 percent in the first half to 19.3 million tons
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Real Estate
Why the Developer thinks Apple Town rises above the Rest
By Manaskhan Meirman
The lavish Apple Town development in south Almaty reached a milestone this summer, the Focus business newspaper reports.
The developer, Woolim company of South
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Regional Business News
Russia to Sell State Assets to cut Debt
Russia plans its biggest sale of state assets since the early 1990s as it seeks to raise more than $29 billion to plug budget gaps over
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Ukraine may sell Ruble-denominated Bonds
By Daryna Krasnolutska and Denis Maternovsky
Ukraine may sell ruble debt for the first time as Russian Prime Minister Vladimir Putin’s government builds ties with former Soviet
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Russia has Its First Black Politician
Residents of the Russian town of Novozavidovo used to stare at Jean Gregoire Sagbo because they had never seen a black man, the Associated Press reports.
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Less Eastern European Growth forecast
Euro-zone governments’ efforts to cut their budget deficits will lead to slower growth in Central and Eastern Europe, the European Bank for Reconstruction and Development predicts.
Euro-zone
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Russian Police kill 2 They tied to Power-plant Attack
Russian police have killed two men accused of bombing a North Caucasus hydroelectric plant just days after President Dmitry Medvedev threatened to sack security officials if
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Angola becomes China’s Top Oil Supplier
Angola passed Saudi Arabia to become the largest source of China's oil imports in the first half of 2010.
China bought 21.7 million tons of crude from
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China has Ambitious Unconventional-Gas Plans
Gas that China produces domestically from shale and other unconventional sources will account for more than a quarter of its supply by 2030.
Developing unconventional gas will
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China’s Big Push on Solar Energy
By Stuart Biggs
Chinese solar panels are helping Rutgers University in New Jersey save $200,000 a year in energy costs.
Yingli Green Energy Holding Co. supplied the
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Prices and Statistics
Volume and Share Index by Visor Capital
Date: July 27, 2010; Source: Visor Capital
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Market Movers by Visor Capital
Date: July 27, 2010; Source: Visor Capital
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Oil and Gas Prices
Date: July 27, 2010; Source: Bloomberg.com
| Petroleum
($/bbl) |
|
Price* |
Change |
%Change |
Time |
| Nymex Crude Future |
78.88
|
-.10
|
-.13
|
02:43 |
| Dated Brent Spot |
77.24 |
.11 |
.14 |
02:52 |
| WTI Cushing Spot |
78.98 |
.25 |
.32
|
07/26 |
| Petroleum
(cent/gal) |
|
Price* |
Change |
%Change |
Time |
| Nymex Heating Oil Future |
204.23
|
-.03
|
-.01 |
02:43
|
| Nymex RBOB Gasoline Future |
210.40
|
-.18 |
-.09 |
02:13 |
| Natural gas
($/MMBtu) |
|
Price* |
Change |
%Change |
Time |
| Nymex Henry Hub Future |
4.64 |
.03 |
.69 |
02:37 |
| Henry Hub Spot |
4.65 |
-.05 |
-1.06 |
07/26 |
| New York City Gate Spot |
5.04 |
-.11
|
-2.14 |
07/26
|
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Commodities
Date: July 27, 2010; Source: Bloomberg.com
| Commodity |
Price |
Change |
%Change |
Time |
| COPPER FUTURE (USd/lb.) |
321.250 |
-1.050 |
-0.33 |
02:44 |
| GOLD 100 OZ FUTR (USD/t oz.) |
1188.600 |
1.600
|
0.13 |
02:44 |
| SILVER FUTURE (USD/t oz.) |
18.180 |
-0.020
|
-0.11
|
02:43 |
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Metal Prices
Date: July 27, 2010; Source: Kitco.com
| Silver |
18.17 |
-0.01 |
| Platinum |
1554.00 |
+8.00
|
| Palladium |
474.00 |
+4.00
|
| Rhodium |
2,250.00 |
0.00
|
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Exchange rates
Date: July 27, 2010; Source: the National Bank of Kazakhstan
| 1 USD |
KZT 147.30 |
1 CHF |
KZT 139.58 |
1 CNY |
KZT 21.72 |
1 TRY |
KZT 97.10 |
10 JPY |
KZT 1.69 |
| 1 EUR |
KZT 189.99 |
1 AUD |
KZT 132.17 |
1 KGS |
KZT 3.22 |
1 UZS |
KZT 0.09 |
|
|
| 1 GBP |
KZT 228.04 |
1 CAD |
KZT 141.99 |
1 RUB |
KZT 4.86 |
100 KRW |
KZT 12.37 |
|
|
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Volume and Share Index by Visor Capital
Date: July 28, 2010; Source: Visor Capital
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Market Movers by Visor Capital
Date: July 28, 2010; Source: Visor Capital
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