Soil conditions point to an improvement on last year’s drought-ravaged crop in the vast Central Asian state, which is aiming to diversify its farm sector by attracting investors in a wide range of food projects, Asylzhan Mamytbekov told Reuters.

“Kazakhstan is not only grain and meat. There is a wide spectrum of projects for investors,” Mamytbekov said in his first interview since being appointed minister last month.

Kazakhstan, the world’s seventh-largest wheat exporter last season, plays a key role in regional food security. It consumes around 2.5 million tonnes of grain annually while producing, on average, upward of 15 million tonnes a year.

Black Sea wheat shipments have fallen dramatically in the current marketing year after a summer drought ravaged crops across the former Soviet Union, prompting a rush from consumers in North Africa and elsewhere to secure alternative supplies.

Russia’s grain export ban has allowed Kazakhstan to grab a share of regional markets this year, Mamytbekov said, while some central Russian regions had taken the highly unusual step of buying feed grain from Kazakhstan.

“Those countries that traditionally buy from Russia — mainly countries in the Caucasus region, such as Armenia, Georgia, parts of Turkey and Azerbaijan — have found Kazakhstan to be their next-closest market,” he said.

The minister said Kazakhstan had exported 5.4 million tonnes of grain so far in the marketing year from July 1, 2010, versus 8.4 million tonnes in the whole of the preceding season He said he expected 2010/2011 exports to reach 6 million tonnes.

Asked about next season’s exports, he said: “I expect no less than this year because, despite the fact that 2010 was a dry year, we managed to export such volumes.

“Perhaps, if we have a big harvest, volumes will grow.”

Kazakhstan, which like Russia suffered from drought last year, harvested only 12.2 million tonnes of grain in 2010 -- a sharp fall from the record crop of 20.8 million tonnes in 2009.

The country’s latest forecast for the 2011 crop is between 15 million and 16 million tonnes. Mamytbekov declined to give a new forecast, saying much would still depend on the weather.

“All of the necessary conditions are satisfactory: soil moisture, technology, seeding. Everything points to the fact that sowing is going to plan, but the weather will determine whether we have a good crop or something similar to last year.”

Mamytbekov said Kazakhstan would focus mainly on its traditional markets of Central Asia, Iran and Afghanistan, as the vast distances to Black Sea and Baltic Sea ports render its grain uncompetitive when Russia and Ukraine are in play.

“Our exports do not necessarily depend on our production, because the Kazakh market is limited by logisitical problems. If Russia and Ukraine have a good harvest, our grain becomes uncompetitive on the Black and Baltic Sea markets,” he said.

“Our grain will be orientated toward those countries to which we have provided stable supplies over the last 10 years.”

Customs data, which follow the calendar year rather than the marketing year, show Azerbaijan was the largest buyer of Kazakh grain in 2010. It purchased 1.4 million tonnes at a cost of $242 million.

Turkey was the next-largest buyer of Kazakh grain, purchasing 747,000 tonnes worth $159 million in 2010, while Iran spent $79 million on 691,000 tonnes of grain.

A new Kazakh-Iranian joint venture terminal in the Iranian port of Amirabad, while not yet in full swing, should allow Kazakhstan to ship more wheat to Iran via the Caspian Sea, said Mamytbekov.

He said Kazakh wheat should be a cheaper option for consumers in northern Iran, including the capital Tehran, than grain imported from other regions via ports on the Persian Gulf, which would then incur a further $30 per tonne in rail tariffs.

“When we can export more to Iran, I think we will also then have the opportunity to enter Arab countries — and there is already interest,” he said. Kazakhstan supplied grain in 2010 to Egypt, Saudi Arabia and Libya, among others.

Kazakhstan also expects to increase annual beef exports to 60,000 tons by 2016 from practically nil today, an ambitious project that will require significant investment in cattle breeding and an overhaul of the country’s veterinary services.

Mamytbekov, who was previously head of state agricultural company Kazagro, said beef exports would be aimed mainly at the Russian, South Korean and Chinese markets, where demand is high.

“South Korea imports between 300,000 and 350,000 tonnes of beef every year. We have had interest from Korean businessmen,” he said. “In order to enter the premium markets where good meat is sold at a high price, we must provide security and quality.”

Investment in food processing plants and infrastructure, as well as better access to information and trading networks, will be key to diversifying the range of crops grown in Kazakhstan. Mamytbekov said this would be one of his priorities as minister.

“There is a lot of conservatism in farming,” he said. “Kazakhstan does not have a problem with maize or soy because we can’t produce it, but because there has not been steady demand.

“How does a farmer decide how to use his land? He thinks: ‘I could grow soy or maize, but where will I sell it?’ He’ll scratch his head and eventually say: ‘OK, I’m better off sowing wheat because at least I know that I can sell it’.”

Investment in Kazakhstan’s agricultural sector grew to 88.8 billion tenge ($610 million) in 2010 from 77.5 billion tenge in 2009, Agriculture Ministry data shows.

Mamytbekov said Kazakhstan would welcome more investment in plants that would buy such crops. “It’s about changing habits,” he said.

“(Farmers) need to know in advance that there will be a buyer.”