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Kazakhstan, UAE in Talks to Create New Shipping Route for Grain Exports

By Vusala Abbasova August 8, 2023

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During the discussions, the parties explored various cargo delivery route possibilities across the Caspian Sea to Iran, with further transit to the Persian Gulf nations.

Central Asia’s largest grain producer, Kazakhstan, is in negotiations with the Abu Dhabi Ports Group (ADP), a major logistics company, to create a joint venture that will enable the shipment of Kazakh agricultural exports via Iran and Gulf ports.

On Monday, Serik Zhumangarin, the Kazakh Minister of Trade and Integration, and Davud Tafti, the head of Simatech Shipping and Forwarding, held a meeting to explore the potential establishment of the shortest direct route for Kazakh exports, connecting to markets along the East African coast, India, the Middle East, Pakistan, and the Persian Gulf.

Through the joint venture, Kazakh exporters are set to benefit from a new and efficient route, which would reduce delivery times to just three days, as they gain access to Iranian ports such as Amirabad, Bandar Abbas, Bandar Imam Khomeini, and Chabahar. This route will further connect them to the United Arab Emirates (UAE) ports of Khalifa and Fujairah, as well as various ports in India, Pakistan, the Far East, and the East coast of Africa, creating broader market opportunities for their agricultural goods.

During the discussions, the parties explored various cargo delivery route possibilities across the Caspian Sea to Iran, with further transit to the Persian Gulf nations.

Simatech Shipping and Forwarding, being a part of the AD Ports Group, holds a prominent position as the leading ship management company in the Persian Gulf. The company boasts a large fleet and specializes in transporting cargo from Iran to Arab countries, India, Africa and China. Additionally, Simatech operates several commercial ports and terminals in various Arab countries.

According to reports, Tafti confirmed that Simatech Shipping and Forwarding had acquired four vessels, each with a carrying capacity of 7,500 tons and a displacement of six meters. These vessels are equipped to transport bulk, container, and break bulk cargo and are currently located at the port of Amirabad.

In addition, as part of its expansion efforts, the company purchased 45 trucks and two barges, each capable of carrying 350 trucks. According to Tafti, it is planned to increase the number of trucks to 200 within the next four months and eventually scale up to a remarkable 1,000 trucks. Simatech Shipping and Forwarding has also set a goal of procuring ten additional vessels over the course of the next two years.

With Kazakhstan's port of Kuryk and the UAE's port of Jebel Ali serving as the primary hubs, the joint venture will ensure the necessary infrastructure is in place for seamless operations. Considering the company owns two dry ports for consolidation and re-packing of cargo, this will give Kazakh exporters an unprecedented opportunity to cross Iran in two to three days.

Kazakhstan boasts vast agricultural lands, covering approximately 274 million hectares, or 74 percent of the country’s land, making it one of the world's largest countries by land area. The country's favorable geography and varied climatic conditions create a conducive environment for grain cultivation. Key grain-producing regions include the northern areas like Kostanay, Akmola, and North Kazakhstan, while large-scale production also takes place in East Kazakhstan, Abai, and Pavlodar.

Kazakhstan is Central Asia’s largest grain producer, with the ability to export approximately half of its annual grain production. Wheat is the country’s largest crop by acreage, accounting for 80% of grain production, but it also produces barley, cotton, sunflower seeds, and rice. As a major player in the region, Kazakhstan takes the lead in flour exports, mainly shipping to other Central Asian nations and Afghanistan.