Chinese to boost its import of Kazakhstani grain and pellets

Starting from 2024, China will increase its receipt of grain and iron ore raw materials (pellets and concentrates) coming from Kazakhstan, according to Kazakhstan Railways (KTZ).

«Starting from January 2024, China will double the receipt of grain cargo in grain carriers, covered cars and containers at the Alashankou railway station. In addition, at the request of Kazakhstan, the PRC will for the first time begin receiving grain in grain carriers and covered cars at the Khorgos railway station. Moreover, due to high demand from Kazakhstani exporters, Chinese authorities will let more products such as vegetable oils, metal ore (pellets and concentrates), and petroleum coke get in the country,» KTZ said in a statement after the 32nd meeting of Kazakhstani and Chinese railway administrations in Shymkent.

During the meeting, the two sides tallied the results over the period from January to August 2023 and agreed to ensure the total amount of shipment at 26.8 million tons of cargo, which is a 3.6-million-ton increase compared to 2022. As a result, Kazakhstan’s exports to China are expected at 16.2 million tons (+25%), while imports from China are expected at 10.6 million tons (+6%).

In addition, representatives of the railway administrations of Kazakhstan and China agreed on the total volume of shipment next year in the amount of 27.8 million tons of cargo, a one-million-ton increase over the 2023 figure. This means that despite China having given consent to boost its receipt of Kazakhstani grain and metal ore materials through the Alashankou railway station, the real increase in shipment will be quite small.

However, Kazakhstan and China also plan to expand the capacity of other border stations and railway sections such as Dostyk – Moiynty and Alashankou – Jinghe, as well as to build new and modernize the current railway terminals. The scope of work was also discussed during the meeting in Shymkent.

In order to meet business demand, two railway companies have been implementing a range of projects aimed at improving railway infrastructure. For instance, KTZ is building a second railway between Dostyk and Moiynty. Kazakhstan also plans to build a third border crossing at Bakhty-Tachen and new railways between Bakhty – Ayagoz, Darbaza – Maktaaral and a roundabout railway in Almaty. In turn, the Chinese are carrying out the reconstruction of the Alashankou station and the railway between Alashankou and Jinghe.

On September 3, KTZ reported that it shipped more than one million tons of grain at its railway stations across the country in August, which is twice as many as last year. During the marketing year (from September 2022 to August 2023), the company shipped about 12 million tons of grain, which is 20% more than last season. At the same time, grain exports increased by 25% and reached 10 million tons.

On that day, KTZ dispatched 1,300 tons of Kazakhstani grain from Almaty to the Chinese city of Jinan (Shandong Province) on a new cargo container train. According to the Ministry of Agriculture of Kazakhstan, this event has kicked off the operation of the Shandong shipment center at the Burundai railway station in Almaty.

Kazakhstan is going to boost its exports of grain to China. Thus, the country’s Food Corporation has signed an agreement with the Chinese company Binzhou Zhongyu Foods. Under this arrangement, the Kazakhstani company plans to export 200,000 tons of grain to China. In turn, the Ministry of Agriculture says that the country’s export of grain can be increased to upward of one million tons a year.