Wheat grain prices decline in the South as supplies from the harvest enter the market

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Remote Monitoring Report
July 2013
Wheat grain prices decline in the South as supplies from the harvest enter the market

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  • Key Messages
  • Projected Outlook through December 2013
    • Key Messages

    • Prices of wheat and wheat flour continued to fall slightly in June, most noticeably in the South, as the wheat harvest progressed in Tajikistan and prospects for northern Kazakhstan’s wheat harvest in August/September continue to be fairly good. The grain harvest in Tajikistan is likely to be of above average volume.

    • Locusts in western parts of Khatlon, the Direct-Rule Districts (DRD), and Sugd have damaged an above average amount of arable land. Control efforts are largely complete, and households should have time to recover from associated crop losses and damage before the lean season starts in January.

    • International labor migration from January to June was higher than last year, providing a major source of income for an increasing number of households between now and November. However, peak labor outmigration for 2013 may have already occurred.

    ZONE

    CURRENT ANOMALIES

    PROJECTED ANOMALIES

    National

    • Since May 2012, wheat and wheat flour prices rose significantly in local currency terms. This is mainly the result of rising prices in Kazakhstan from which large quantities of wheat and wheat flour are imported. First grade wheat flour prices have been largely stable since November though they have marginally declined in May and June. In June, they were 20 to 55 percent above last year’s prices.
    • Prices are likely to continue fall slightly, reflecting falling prices of milling wheat in Kazakhstan. Wheat production in Tajikistan from June to September is likely to be above average in terms of volume. While there has been some erratic rainfall performance, conditions in northern Kazakhstan are much better than last year. The harvest in August is also likely to be average to above average in terms of volume.

    Western Khatlon, Direct-Rule Districts (DRD), and Sugd

    • According to the Ministry of Agriculture, over 87,000 hectares (ha) of arable land have been affected by locusts this year, primarily in western Khatlon, but with some land affected in both western Sugd and western DRD, too. Locusts arrived approximately 10 days earlier than usual, most likely migrating from Uzbekistan and northern Afghanistan. Around 25 to 30 percent more land has been affected than is typical, and this is attributed to weaker-than-normal control efforts in neighboring countries. The affected areas are concentrated near the border with Uzbekistan.
    • Control efforts have been underway, earlier than is typical. The Government of Tajikistan has funding devoted to the effort and has deployed 45 trucks and over 1,000 laborers on control efforts already. Damage to winter and spring crops is likely to be more extensive than is typical due to the earlier migration and higher number and concentration of locusts, but the control efforts are likely to limit further spread of the locusts from the border areas. For areas where control has been reached, there may still be some time for replanting short-cycle spring crops, if there is adequate soil moisture.

    National

    • According to Hydromet, higher than normal, very hot temperatures have occurred in some areas in July.
    • High temperatures are likely to continue in the near future into August. High temperatures can damage horticultural corps, disrupt other agricultural activities, increase the risk of floods and avalanches in high elevation areas, and reduce the availability of some water sources.
    Projected Outlook through December 2013

    By July, rural households, especially at lower elevations and in southern Tajikistan, start to shift from consuming food primarily purchased on markets and often imported to food produced by the household or produced domestically within Tajikistan. At the same time, diets become more diverse in both rural and urban areas, as households gain more access to locally produced vegetables, fruit, and milk products in addition to the staples of wheat flour, vegetable oil, potatoes, and rice. Prices also start to decline slightly according to the seasonal pattern. According to the World Food Program’s July 2013 Market Price Report, the cost of the minimum food basket in Dushanbe has even fallen slightly between May and June.

    Through June 2013, the Migration Service of Tajikistan has recorded over 571,000 departing migrants, which is 15 percent more than last year. Continued high labor migration levels will likely lead to higher labor migration earnings and remittances being sent back to Tajikistan between now and November. However, in a pattern similar to 2012 and 2009, peak outmigration may have occurred in May with there being a month-on-month decline in departures from May to June.

    While total cumulative rainfall since the beginning of the wet season in October may still be somewhat below average, rain and snowfall fell regularly in Tajikistan from February to the middle of May, and the volume of spring rain was steady in March and April and very well distributed over time. Thunderstorms and locusts have also caused an above average level of crop damage this year. Winter and spring crops are currently developing well, and the harvest of winter grain crops has begun. In the South, it appears to be moving onto markets as Kurgan-Tyube recorded a six percent decline in the wheat grain price from May to June. The Normalized Difference Vegetation Index (NDVI) indicates vegetation is greener than last year  in higher elevation areas that have not yet started harvesting, and it is generally above the 2001 to 2010 average.

    Conditions in Kazakhstan are generally favorable with continued rain, though the later than usual start of season and colder than usual spring, may have delayed some wheat growth. NDVI tells a mixed story with some areas doing well and other less so regarding the crop development in the northern, wheat surplus-producing oblasts. Kazakhstan serves as the primary source of imported wheat and wheat flour.
    Figures Seasonal Calendar in a Typical Year Seasonal Calendar in a Typical Year

    Source : FEWS NET

    In remote monitoring, a coordinator typically works from a nearby regional office. Relying on partners for data, the coordinator uses scenario development to conduct analysis and produce monthly reports. As less data may be available, remote monitoring reports may have less detail than those from countries with FEWS NET offices. Learn more about our work here.
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