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Special Report: Prospects Look Good for Kazakh Wheat Exports

According to the International Grains Council, Kazakhstan's wheat harvest for the 2024/2025 season is expected to reach 16 million tons. As the harvesting campaign begins, the country's lack of elevator capacity and the problem of mainline railroads are concerns. Idle trains are still a problem, which leads to the introduction of regular restrictions and bans on the acceptance and shipment of wheat due to congestion on the railroad. Market participants note that the railroad cannot cope with the volume of shipments during the autumn rush, with its infrastructural ceiling on shipments at only 1 million tons of grain per month. This leads to a collapse at border railroad crossings and, consequently, a price drop in the domestic market. One obvious solution is to expand Kazakhstan's elevator capacity and grain storage facilities; this is one of the reasons for the increased load on the railroad infrastructure. Thus, according to the Ministry of Agriculture, 191 licensed grain-receiving enterprises have a total storage capacity of more than 13.2 million tons. In addition, agricultural producers have storage capacities for 15.8 million tons of grain, which, as the ministry assures, is enough to store grain considering the projected harvest. Also, according to the ministry, the construction of new grain storage facilities and the expansion of existing ones are envisaged. In 2024-2026, it plans to operate five granaries with a capacity of 30,200 tons. The national railway company Kazakhstan Temir Zholy (KTZ) has already established a grain headquarters, involving representatives from local executive bodies, the National Chamber of Entrepreneurs "Atameken," and shippers. This headquarters ensures adequate transportation for the upcoming season's harvest. As Salamat Abzhaliyev, Deputy General Director for Marketing and Planning of KTZ-Gruzovye Transportations LLP, noted during the briefing held at the end of August, for seven months of the current year, the total volume of grain loading on the network of railroads of the country amounted to 4.7 million tons. Only in Kazakhstan did wheat transportation increase by 3%, amounting to 1.1 million tons. An important factor affecting the efficiency of transporting grain and milling products is the availability of specialized wagons. In addition to boxcars, grain carriers are designed to transport these specific cargoes. Today, the total fleet of boxcars and grain cars on the railroad is about 16,000 and 12,000, respectively. According to KTZ, this fleet is sufficient to fulfill all agreed transportation plans. According to forecasts of the International Grain Council, the export of Kazakhstani wheat in the 2024/2025 season is projected at 10 million tons. During the first six months of the year, 2.4 million tons of wheat have already been shipped. The main buyers of domestic grain are traditionally Uzbekistan, China, Tajikistan, Italy, and Afghanistan. Grain exports to China have grown 5.7 times in the last three years, which makes China a key export destination. China is ready to accept large volumes of grain from Kazakhstan. Today, the country buys about 10 million tons of wheat worldwide, including from Kazakhstan. However, further development of trade is constrained by limited transportation...

Investments Afghanistan Economy Railway Railway stations Transport

Uzbekistan Repairs Afghanistan’s Naibabad Railway Station

Uzbekistan Railways JSC reports that the opening ceremony of the restored Naibabad railway station in Afghanistan was held on August 7. The restoration work was carried out by Uzbekistan Railways JSC in cooperation with the Termez regional railway junction and Sogdiana Trans. During the ceremony, the first freight cars arrived at Naibabad. Afghanistan plays an important role in connecting Central and South Asia through road and railway routes passing through its territory. The Naibabad station will be an important center for transporting goods from Russia, Kazakhstan, China, and European countries to Pakistan, India, and other South Asian countries. Particular attention was paid to accelerating the implementation of the Trans-Afghan railway construction project along the Mazar-e Sharif-Kabul-Kharlachi route. This project significantly improves regional logistics relations and trade and economic cooperation. Kazakhstani diplomat Aidar Borangaziev said that Uzbekistan and SCO member states benefit from economic projects implemented in Afghanistan. These projects include the trans-Afghan railways, the North-South Transport Corridor, and the Central Asian branches of the New Silk Road – part of the Partnership Network concept of strategic ports and logistics centers being developed within the SCO.

New rail routes Transport Railway

Steel Highways: The State of Central Asia’s Railways

Railways in Central Asia have always played an important political and economic role, but amid the current geopolitical turbulence, they have become a crucial means of transporting goods from China to Europe and the Middle East, bypassing sanctioned Russia. But what is the state of Central Asia's railway industry, and is it up to the new challenges? The history of rail transport in Central Asia dates back to the end of the 19th century. In 1874, a special commission of the Russian Empire recognized the need to construct a line from Orenburg to Tashkent. Later, however, strategic considerations forced a change of plan and to ensure a stable connection between the Turkestan and Caucasus regions, the first steel highway in Central Asia would be built to connect Tashkent with the eastern coast of the Caspian Sea. This was an active period of the so-called Great Game, when Russia and Great Britain competed in Central Asia. Since then, the geopolitical importance of railways in the region, which lacks access to oceans, has not decreased whatsoever. Indeed, amid armed conflicts in the Middle East and between Russia and Ukraine, railways have become even more important given their role in ensuring the movement of goods along the Trans-Caspian International Transport Route (TITR) and the International North-South Transport Corridor (INSTC). Against this backdrop, Kazakhstan's President Kassym-Jomart Tokayev has tasked the national railway company Kazakhstan Temir Zholy (KTZ) with leading the transformation of the country into a transport and logistics hub. Kazakhstan: A story of steady development The length of Kazakhstan's mainline rail network is over 16,000 km, with over 800 stations and crossing points. The freight car fleet exceeds 120,000 units, while locomotives number more than 1,700. Kazakhstan’s railways account for 70% of freight traffic, and 60% of passenger traffic in the country. Just under 1% of the country’s population is employed in the rail industry. According to the KTZ's annual report in 2023, container transit rose 14% year-over-year to 1.282 million TEU (twenty-foot equivalent units), which drove a 30.6% year-on-year rise in operating income to KZT1.934 trillion, while net profit came in at KZT136.8 billion ($286.8 million). The volume of freight transported between Kazakhstan and China was also up 22% to 28 million tons. In addition, KTZ reported the completion of large-scale track repairs in 2023, with 1,443 km of railway track repaired, double the figure achieved in 2022. The start of large infrastructure projects was also noted. In particular, construction was launched of the Darbaza–Maktaaral and Bakhty–Ayagoz lines (with a third border crossing with China set to be opened in 2027), while construction of the bypass line around Almaty also commenced. Over 300 km of the second track was laid on the Dostyk-Moyynty railway section. Finally, a Kazakh transport and logistics terminal was opened in the Chinese dry port of Xi'an. Uzbekistan: First high-speed rail in Central Asia O’zbekiston Temir Yo’llari (UTY), Uzbekistan's national rail carrier, was founded on November 7, 1994, taking over the lines of the Soviet-era Middle...

Turkmenistan Transport China Export/Import Economy Railway Iran New rail route

Iran-Turkmenistan-Kazakhstan-China Rail Transport Route Resumes Operation

KTZ Express, a subsidiary of Kazakhstan’s national railways company Kazakhstan Temir Zholy (KTZ), and China Railway Container Transport Co. Ltd. have resumed the operation of container trains on the Iran-Turkmenistan-Kazakhstan-China route. As reported by KTZ’s press service, representatives of Iran, China, Kazakhstan, and Turkmenistan attended a ceremony on July 21 at Iran's Aprin station to mark the departure of a container train to China. The train, consisting of 50 forty-foot containers, will arrive in China within 12 days. This shipment marks the restoration of the transport corridor, strengthening trade relations between participating countries.

Railway Strategy China Transport Investments

Kyrgyzstan to Take Chinese Loan to Build Railroad

Kyrgyzstan intends to take a loan from China to construct the China-Kyrgyzstan-Uzbekistan railroad. Azamat Sakiyev, the General Director of Kyrgyz Temir Jolu NC, stated at the Parliamentary Committee on Transport, Communications, Architecture, and Construction meeting, 24.kg has reported. The Speaker noted that the feasibility study for the project has already been developed, and the agreement amounts to $4 billion 700 million. "According to the agreement, 51% of the costs will be covered by the People's Republic of China, and the Kyrgyz and Uzbek sides will assume 24.5% each," Sakiyev said. "Where will we find $1 billion?" MP Baktybek Sydykov asked, to which Sakiev replied that the Kyrgyz Republic intends to borrow money from Chinese banks. Sakiyev specified that the Chinese side would lend the joint venture half of the total project cost—$2 billion 350 million—and the parties would cover the other $2 billion 350 million at their own expense. As a result, Kyrgyzstan's share will amount to $783 million. The China-Kyrgyzstan-Uzbekistan railroad is a projected 454-kilometer railroad designed to connect the railroads of China and Uzbekistan through the territory of Kyrgyzstan and further through Turkmenistan, Iran, and Turkey, to connect with the European railroad network within the framework of the New Silk Road transport system. Previously, Kyrgyz President Sadyr Japarov had said the construction would cost between $3 and $5 billion.

Railway Transport and Logistics

Kazakhstan’s National Railway Carrier Under Threat of Default

The Chairman of the Supreme Audit Chamber (SAC), Alikhan Smailov, has discussed the possible default of national rail carrier, Kazakhstan Temir Zholy (KTZ). According to Smailov, the company cannot currently fulfill its obligations. "The company is in the ‘red’ zone of credit risk. At the beginning of 2024, its debt amounted to 2.9 trillion tenge ($6 billion) and continues to grow; 45%, or 1.3 trillion tenge ($2 billion), of the total debt is aimed at refinancing previously assumed debt obligations,” said Smailov, answering questions from deputies. According to Smailov, Samruk-Kazyna JSC's existing corporate governance methods and development strategy, which include KTZ, are not able to prevent the crisis the country's national railway company is facing. “Further deterioration of assets, the build-up of debts, and the inability to service them without fundamental management changes will lead to the default of KTZh,” Smailov stated. A large amount of budget funds has been spent on developing the railway industry over the past four years, but it has not been enough. The money invested has yet to meet the nation's needs for freight and passenger transportation, Smailov emphasized.