Kazakhstan will boost grain exports to Iran and China this 2013/14 marketing year as it seeks to diversify regions of supply and reduce dependence on Russian and Ukrainian ports, the country’s state grain trader said.

Kazakhstan, Central Asia’s largest grain producer, exports the bulk of its grain - mainly wheat and wheat flour - by rail. Its only port on the Caspian Sea can handle less than 6 percent of its annual grain exports.

The volume of its supplies by rail to Russia and Ukraine, which are then handled by ports on the Black Sea and the Azov Sea, is declining this year, said Nurbek Dayirbekov, head of the state grain trader.

“Kazakhstan is finding new niches and diversifying its grain (trade) flow,” Dayirbekov, head of the Food Contract Corporation, told reporters. “That’s why we see a decline in exports to the countries of the European Union, Turkey...”

Kazakhstan will boost wheat supplies to Iran to 1.2 million tonnes in the 2013/14 marketing year, which lasts until June 30, he said. The country supplied 345,600 tonnes of wheat to Iran in the previous year.

The rise stems from a rebate for transit supplies that Kazakhstan obtained from Turkmenistan and the launch of part of a railroad to Turkmenistan last year, Dayirbekov said. He did not say how much Kazakh wheat had already been supplied to Iran.

The Caspian port of Aktau in western Kazakhstan can handle between 500,000 and 600,000 tonnes of grain annually, a large part of which goes to Iran.

The trader also said it expected Kazakh grain exports to China to more than double to 370,000 tonnes this year and hoped that in the future it would be able to transport its grain via China to countries in Southeast Asia.

Kazakhstan’s exports of grain by rail rose to 7.3 million tons between July 1 and April 20 from 5.7 million in the same period of 2012/13, the Agriculture Ministry said in a statement earlier on Wednesday.

Its grain exports included 2.3 million tons of flour in grain equivalent so far this marketing year, up from 2.0 million in the same period of the prior crop season, the ministry said.

The country’s 2013/14 exportable grain surplus was raised to 9.5 million tons from the previously expected 9.0 million tons, Dayirbekov told reporters. (Reuters)