Production:

Winter wheat planting finished in December 2014. Wheat area increased 150,000 hectares (ha) in MY 2015/16. In the Thrace region some planted wheat areas were flooded due to heavy rain. Most of those fields will be replanted with sunflower. Post forecasts MY 2015/16 wheat production at 18 MMT in MY 2015/16 based on favorable weather conditions throughout most of Turkey. Post assumes sufficient rain and favorable conditions will continue from April to June.

Central Anatolia is the leading grain producing region of Turkey. Wheat and barley are the traditional products of this high plateau region. So far in MY 2015/16 rainfall in the region is higher than normal and snow cover is favorable for wheat production. Total wheat area in Central Anatolia is 3,000,000 hectares (ha) and the average yield is 2 metric tons/hectare (MT/ha). Of the total 6.2 MMT of wheat produced in Central Anatolia in MY 2015/16, 0.85 MMT was durum wheat. Wheat plant height was 20 cm in March 2015 and development was good. In some areas there were yellow colors observed in the wheat field.

In Southeast Turkey, the provinces of Şanlıurfa, Diyarbakır and Mardın are the primary producers of wheat. The wheat area increased slightly in MY 2015/16 compared to MY 2014/15 because some farmers switched from cotton back to milling wheat as first crop and corn for second crop. The wheat producing area of Southeast Anatolia is approximately 953,000 ha with an average yield of 2.6 MT/ha. Southeast Anatolia produced 2.5 MMT of wheat in MY 2014/15. Of this total, 1 MMT was durum wheat.

In Thrace, farmers planted 600,000 ha of wheat. The average yield in the region is 4.3 MT/ha. The region is expected to produce 2,500,000 MT of wheat in MY 2015/16. Due to high rain levels and flooding this winter, 10,000 MT of wheat might be damaged in the Thrace region. Wet conditions are expected to increase plant disease and lower the quality of the wheat.

Turkish Wheat Production by Region

Regions

MY 2010/11 Avg. yield (MT/HA)

MY 2011/12

Avg. yield (MT/HA)

Long term Avg. yield (MT/HA)

Harvest Time

MY 2013/14

MY 2014/15

MY 2015/16

Harvested Area (ha)

Production (MT)

Harvested Area (ha)

Production (MT)

Harvested Area (ha)

Production (MT)

Çukurova region

3.5-4.5

4.7

4.5-5.5

May10-

June 10

250,000

1,300,000

255,000

1,100,000

265,000

1,300,000

Hatay region

3

4.7

5-5.5

May25-

June 25

85,000

280,000

86,000

200,000

86,000

250,000

Southeast region

2

2.9

3-3.5

May15-

June 25

930,000

2,500,000

948,000

2,300,000

953,000

2,555,000

Central Anatolia

2

2.38

1.5-2

June25-

July 25

2,905,000

6,200,000

2,915,000

4,800,000

3,000,000

6.200,000

Polatlı

2.8-3

3.4

3.3

June15-

July 20

130,000

450,000

100,000

30,000

130,000

400,000

Aegean region

2-2.5

3

3

May25-

June 25

500,000

1,650,000

500,000

1,650,000

500,000

1,650,000

Aydin region

4.5

4

4

May20-

June 10

6,000

45,000

6,000

45,000

6,000

45,000

Thrace

3.5

4.1

4.1

June15-

July 15

600,000

2,500,000

600,000

2,300,000

600,000

2,500,000

Other regions

1.3

1.4

1.5

June15-

July 15

2,300,000

3,075,000

2,300,000

3,075,000

2,320,000

3,100,000

Total

2.12

2.3

2.3

My 15-July15

7,706,000

18,000,000

7,710,000

15,250,000

7,860,000

18,000,000

The Çukurova region has 275,000 ha of wheat planted in MY 2015/16. The wheat area slightly increased in MY 2015/16 compared to MY 2014/15 because some Çukurova farmers switched from cotton back to wheat. The Çukurova region is expected to produce 1.3 MMT of wheat in MY 2015/16.

The Aegean region has 275,000 ha of wheat planted in MY 2015/16. Wheat is in a very good condition so far. Wheat germination and plant development is favorable except a few fields in Thrace which were affected by flooding.

Wheat premium payments will remain at 50 Turkish Lira (TL)/MT ($26/MT) in MY 2015/16.

TMO began purchasing based on protein content for the first time in 2011. TMO announced their new purchasing policy before the MY 2015/16 harvest. TMO's purchasing policy is meant to encourage farmers to produce more quality wheat by offering a greater premium for higher protein content and lower pest damage.

Estimated total durum wheat output for MY 2014/15 decreased to 1.75 MMT. Durum wheat is produced mainly in Central Anatolia and Southeast Anatolia. Central Anatolia has 240,000 ha of durum wheat area that yielded an average 3.4 MT/ha in MY 2014/15. The quality of durum wheat in MY 2014/15 was higher compared to MY 2013/14 due to drought.

Southeast Anatolia has 250,000 ha of durum wheat area. MY 2014/15 yields were 3.8 MT/ha, which was lower than MY2013, but yields were better than previous estimates early in harvest.

Turkey is forecast to produce 1.9 MMT of durum wheat in MY 2015/16. Although the durum wheat planting area remained the same in Central Anatolia and Southeast Anatolia compared to MY 2014/15, yields are expected to increase due to favorable weather conditions. Although wheat prices are higher than last year, corn is still more attractive than other field crops.

Government support program for wheat (TL and $/MT)

Turkey: 2015 Government support for wheat producers

Year

Certified seed (TL, $/ha)

Soil analysis

(TL, $/ha)

Premium

(TL, $/Ton)

Diesel

(TL, $/ha)

Fertilizer

(TL, $/ha)

2009

50 TL

22.5 TL

45 TL

29.3 TL

38.3 TL

$32.25

$14.51

$29.03

$18.9

$24.71

2010

50 TL

25 TL

50 TL

32.5 TL

42.5 TL

$33.33

$16.66

$33.33

$21.66

$28.33

2011

60 TL

25 TL

50 TL

37.5 TL

47.5 TL

$35.71

$14.88

$29.76

$22.32

$31.66

2012

60 TL

25 TL

50 TL

40 TL

50 TL

$33.33

$13.29

$27.77

$22.22

$27.77

2013

75 TL

25 TL

50 TL

43 TL

55 TL

$39.47

$13.15

$26.31

$22.63

$28.95

2014

75 TL

25 TL

50 TL

46 TL

60 TL

$34.72

$11.57

$23.15

$21.29

$27.77

2015

85 TL

25 TL

50 TL

48.5 TL

66 TL

$34.55

$10.16

$20.32

$19.71

$26.83

Due to significant decreases in harvest figures, the Turkish Grain Board (TMO) did not announce wheat intervention prices for MY2014. However, TMO received authorization to import 4.2 MMT of wheat, barley, rice and corn at zero customs duty, authorized through a Cabinet of Ministers Decision published in the Official Gazette on April 19, 2014. Typically, TMO stops its sales of wheat for milling, pasta and biscuits at the beginning of the domestic wheat and barley harvest.

Within this context, TMO has held 12 import tenders since June 3, 2014. Through these tenders TMO has imported about 1.2 MMT of milling wheat, 0.7 million MMT of barley, 170,000 MT of corn, 8,000 MT of rice, and 40,000 MT of paddy rice in MY 2014/15. Also, TMO has imported about 60,000 MT of durum wheat.

Historic TMO Wheat intervention price and premiums

Turkey: TMO wheat intervention prices and wheat premiums (TLand $/MT)

Year

Intervention price

Premium

2007

425 TL

45 TL

$326.9

$34.6

2008

500 TL

45 TL

$384

$34.6

2009

500 TL

45 TL

$322.58

$29

2010

550 TL

50 TL

$366.66

$33.33

2011

605 TL

50 TL

$360.11

$29.76

2012

665 TL

50 TL

$369.44

$27.77

2013

720 TL

50 TL

$380

$26.31

TMO began its domestic sales to meet internal demand in October. TMO has import quotas for the EU under bilateral agreements allocated by The Ministry of Economy. The private sector also benefited from this allocation of 330,000 MT of wheat in 2014.

Consumption:

Post forecasts Turkish consumption at 16.8 MMT, which is unchanged from recent years. Although Turkey has a young and growing population, more affluent consumers are moving away from wheat-based products in roughly equal amounts to those consumers who are increasing their consumption. Further, the GOT has promoted programs to reduce wheat and in particular bread waste.

Turkish total domestic pasta consumption increased from 5.5 kg/person to 7 kg/person in 5 years with the help of the sector's efforts and promotions. Turkish total domestic pasta consumption was about 560,000 MT in CY 2014. There are 23 pasta factories in Turkey. Turkish pasta production capacity is currently 1.8 MMT/year. However, capacity use rate is 70 percent in CY2014.

Due to lower production levels compared to MY 2013/14 and high international prices, durum wheat prices remained high in MY 2014/15 compared to the last two years. The Konya commodity market exchange (CME) is the leading exchange for durum wheat in Turkey. The average durum wheat price increased 18 percent compared to the previous year to 949 TL/MT, which was 805 TL/MT ($423/MT) in MY 2013/14 and 723 TL/MT ($401) in MY 2012/13.

The average durum wheat import price in CY 2014 increased to $460/MT. It was $395/MT in CY 2013. The 16 percent climb in price is masked by the Turkish Lira's 22 percent decline against the dollar from March 2013 to March 2014.

TMO has also offered to sell 80,000 MT of its imported durum wheat stocks to pasta and semolina producers in February 2015 at a price of 920-950 TL/MT (US$ 373-386 MT), excluding VAT and handling charges.

Turkey Wheat Sell Price

TMO sell price

Sell Price (TL and $/MT)

Type

November

December

January

February

March

Anatolian Hard White Wheat

855 TL

855 TL

870 TL

880 TL

880 TL

$383

$372

$372

$357

$339

Anatolian Hard Red Wheat

855 TL

855 TL

870 TL

880 TL

880 TL

$383

$372

$372

$357

$339

White Semi Hard

835-845 TL

835-845 TL

850-860 TL

860-870 TL

860-870 TL

$374-378

$364-369

$365-370

$350-354

$332-336

Red Semi Hard

835 TL

835 TL

850 TL

860 TL

860 TL

$374

$364

$364

$349

$331

Other Red And White Wheat

820-855 TL

820-855 TL

835-870 TL

845-880 TL

845-880 TL

$368-383

$358-373

$358-373

$343-358

$326-340

Durum

-

-

920-950

920-950

-

-

-

$395-408

$374-286

-

Feed Wheat

745 TL

755 TL

745 TL

755 TL

775 TL

$334

$329

$319

$306

$299

Imported (12.5 protein)

870 TL

870 TL

870 TL

870 TL

870 TL

$390

$379

$372

$353

$335

Imported (13.5 protein)

880 TL

880 TL

880 TL

880 TL

880 TL

$394

$383

$376

$357

$339

Turkey had poor wheat harvest in MY 2014/15 because of drought weather conditions. Despite all pressures on wheat prices, prices increased only about 15 percent compared to 2013.

The Polatlı CME is the main commodity market exchange for red milling wheat in Turkey. The average price of high quality red milling wheat in the Polatlı CME in MY 2013/14 was 814 TL/MT ($428) and 938 TL/MT ($434) in MY 2014/15. The average red milling wheat on the Polatlı CME is 880 TL/MT ($357/MT) in March 2015.

TMO imported over 1 MMT of wheat after the poor harvest in MY 2014/15. According to traders, TMO is preparing to procure again in the new marketing year following an expected abundant harvest. Therefore, TMO is currently selling existing stocks before the harvest in May.

TMO offered 796,978 MT of their stocks of imported wheat to flour and bulgur producers in February 2015 at a price of 870 TL/MT ($353/MT) for 12.5% protein, 880 TL/MT ($357/MT) 13.5% protein, excluding VAT and handling charges. TMO also offered their stocks of domestic wheat from 2009, 2010 and 2011 in February 2015 at a price of 775 TL/MT ($315/MT) for feed quality and 905 TL/MT ($368/MT) for 13.5% protein, excluding VAT and handling charges with 90 days payment.

The March 2015 wheat CIF import price in Marmara was $235/MT for 13.5% protein wheat and $220/MT for 12.5% protein wheat. The price in February 2015 was $262/MT and decreased with decreasing Turkish demand and the Ruble's value. The domestic wheat flour price remained stable in MY 2014/15. The average wheat flour export price was $413/MT in MY 2014/15.

Average wheat flour price at the Bandırma Commodity Exchange

WHEAT FLOUR PRICE MY 2014/15 (TL and $/kg)

June

July

Aug

Sept

Oct

Nov

Dec

Jan

Feb

59.12 TL

59.19 TL

62.53 TL

62.81 TL

62.38 TL

61.8 TL

62.39 TL

62.37 TL

62.49 TL

$28.02

$28.05

$29.08

$28.4

$27.7

$27.7

$27.2

$26.7

$25.4

Trade:

Post forecasts Turkish wheat imports at 3.5 MMT, which is 2 MMT lower than in MY2014 due to improved production and lower demand from the export sector. Higher production equates to Turkish demand for higher protein wheat, typically from the Black Sea region. However, constraints on exports to Turkey's key markets in Syria and Iraq are likely to reduce demand for high quality wheat imports that are blended with domestic wheat to meet export specifications. Further, Turkish wheat flour exports to Southeast Asia and pasta exports to Africa have decreased. Therefore, Post forecasts Turkish wheat equivalent exports of 3.8 MMT, which is equal to exports in MY 2014/15 but down from 4.4 MMT in MY 2013/14.

Turkey imported 3.97 MMT of wheat in MY 2012/13 and 4.12 MMT in MY 2013/14. Processed product exports are the key factor regarding wheat imports. After a poor harvest last year, traders rapidly imported 3.17 MMT in the first 6 month of MY 2014/15, assuming export quantities would be maintained. Also, TMO began importing wheat in June in order to control domestic prices. After Russia, Turkey's biggest wheat supplier, announced an export tariff as of February 2015, traders tried to import as much as they could to close their position in Russia.

TMO imported over 1 MMT of wheat after the poor harvest in MY 2014/15. According to traders, they are preparing to procure from the expected abundant harvest in the new marketing year. Therefore, TMO is trying to sell its existing stocks before the next harvest in May. For this purpose, besides TMO's routine domestic sales in February, TMO has opened its domestic wheat stocks to the wheat flour producers at world prices ($225-260MT). Turkish wheat flour producers' demand for TMO stocks was limited due to TMO's high prices, and because decreased exports reduced the number of inward processing certificates generally used to buy TMO supplies. TMO sold about 35,000 MT of wheat at this price. Even more, TMO discounted wheat prices sharply and TMO is selling their domestic wheat to flour producers March 15 to April 2015 at $185-225/MT with respect to quality. According to market sources, TMO needs more space in their silos for the coming harvest season.

In January 2015, Turkey imported 579,768 MT of wheat. Of this total, 3,246,306 MT came from Russia, 228,412 MT from Mexico and 180,898 MT from Ukraine.

Turkish Wheat Imports (Origin)

Turkey: Quantity of wheat imported

Countries

MY2012

MY2013

MY2014*

Russia

2,322,171

3,043,815

3,246,306

Mexico

84,901

175,135

228,412

Ukraine

150,201

128,478

180,898

Others

1,422,574

781,805

687,628

Total

3,979,847

4,129,233

4,343,244

Wheat imports were about to stop in the last quarter of MY 2014/15 due to the favorable price offered by TMO, and due to expectations for a large harvest in June. The result was a temporary decrease in flour exports.

Wheat foreign trade data in MY 2013/14 and MY 2014/15

TURKEY: WHEAT FOREIGN TRADE

MONTH

IMPORT

MY 2013/14

IMPORT

MY 2014/15

EXPORT

MY 2013/14

EXPORT

MY 2014/15

(MT)

(MT)

(MT)

(MT)

June

113,852

193,002

196,279

1,305

July

298,833

212,071

0

2,252

August

462,792

690,763

1,020

8,804

September

551,851

669,410

13,068

14,458

October

347,065

583,893

6,163

26,573

November

442,905

823,789

5,543

10,316

December

390,169

590,547

654

4,758

Sub-total (June-Dec.)

2,607,467

3,763,476

222,727

68,467

January

307,150

579,768

0

14,251

February

194,339

2

March

210,913

0

April

374,067

50

May

435,297

53

MY TOTAL

4,129,233

5,500,000*

222,833

100,000*

*forecast

The Ministry of Economy allocated TMO an import quota for the EU under a bilateral agreement. However, in MY 2014/15 the private sector utilized the quota, benefitting from this allocation of 330,000 MT of wheat rather than TMO. In MY 2014/15, wheat imports from EU countries reached 600,000 MT.

Total Wheat Foreign Trade

Turkey: Wheat Foreign Trade Data

YEAR

IMPORTS ($)

IMPORTS (MT)

EXPORTS ($)

EXPORTS (MT)

MY 2011/12

913,130,430

3,185,841

27,091,653

106,339

MY 2012/13

1,315,669,981

3,979,847

24,019,898

66,257

MY 2013/14

1,246,215,659

4,129,233

64,635,108

222,832

MY 2014/15*

1,230,745,522

4,343,244

43,252,245

82,718

*June 2014-January 2015

Flour

Turkey exported 1.42 MMT of wheat flour in the first eight months of MY 2014/15. Turkey exported 1.62 MMT of wheat flour in the first eight months of MY 2013/14. The 13 percent decrease mainly represents market loses in neighbor countries and in the Far East.

Turkish Wheat Flour Exports

Turkey: Quantity of wheat flour exports

MONTH

MY 2012/13

MY2013

MY2014

My2013-2014

%

June

173,704,009

125,195,952

153,574,850

22.67

July

163,235,576

188,693,597

158,564,073

-15.97

August

161,631,254

163,862,583

207,893,031

26.87

September

198,537,092

234,976,374

194,012,033

-17.43

October

148,502,159

226,624,254

189,591,090

-16.34

November

161,418,786

245,485,937

197,962,949

-19.36

December

138,596,123

238,197,473

171,826,909

-27.86

January

133,154,834

195,609,615

148,632,819

-24.02

February

116,266,064

169,874,720

March

138,895,157

176,637,136

April

154,360,220

214,861,329

May

176,654,945

177,508,990

TOTAL

1,864,956,219

2,357,527,960

1,422,057,754*

* Marketing Year to January 2015.

One of the key factors in wheat trade is the Turkish inward process regime. It is a useful tool for millers to be competitive in the wheat flour export market. Exporters of wheat products such as wheat flour and pasta exporters are eligible to get special import licenses when they export wheat products. For example, when pasta exporters export 100 MT of pasta they are eligible to import 175.4 MT of wheat at a zero tariff rate (conversion rate is 1.754), and when a wheat flour producer exports 100 MT of wheat flour they are eligible to import 140 MT of wheat duty free.

Usually wheat flour exporters and pasta exporters do not use this zero tariff import license by themselves, but they sell it to international trading companies or experienced domestic traders. The price offered for the licenses changes according to world wheat prices. The more exported means the more and relatively cheaper the licenses become. Recently, the market value of the licenses increased to $120/MT compared to December 2014, when they were $100/MT. In a normal season the license fee is usually $90/MT.

Wheat Flour Export Markets (quantity)

Turkey: Major Wheat flour market of Turkey

Partner Country

Quantity

% Share

% Change

MY 2011/12

MY 2012/13

MY 2013/14

MY 2013/14

MY 2013/2012

Iraq

911,914

910,674

1039084

44.08

14.10

Syria

746

73,104

275,229

11.67

276.49

Philippines

136,750

159,599

169,072

7.17

5.94

Angola

35586

61,215

104,725

4.44

71.08

Indonesia

346,027

108,330

93,162

3.95

- 14.00

TOTAL

2,153,581

1,864,956

2,357,528

100.00

26.41

Russia, Ukraıne and the EU are the leading high protein wheat suppliers to Turkey. Turkey usually blends domestic wheat with high protein imported wheat to produce its wheat flour.

MY 2013/14 was a record year for Turkish flour exports. Although Turkish flour millers export to over 130 countries, only 2 countries represented about percent 60 of all export: Iraq and Syria.

Exports to Syria during the period of May 2013 to January 2014 were 191,377 MT. But exports in the period of May 2014 to Jan 2015 (in MY2014) decreased to 160,259 MT.

Exports to Iraq during the period of May 2013 to January 2014 were 700,118 MT. But in the period of May 2014 to January 2015 (in MY2014) exports decreased to 687,756 MT. Wheat flour exports slowed after September compared to MY2013 due to political unrest and problems shipping to and in neighbor countries.

Besides ongoing losses in export markets in Syria and Iraq, Turkish flour millers lost presence in the Far East countries because of dumping duties in the Philippines and competition with new milling investments in Indonesia.

Exports to Indonesia during the period of May 2013 to January 2014 were 71,037 MT. But in the period of May 2014 to January 2015 (in MY2014) exports decreased to 35,439 MT.

Exports to Iraq during the period of May 2013 to January 2014 were 118,705 MT. But in the period of May 2014 to January 2015 (in MY2014) exports decreased to 88,546 MT. Imports from Turkish flour milling companies are subject to anti-dumping duties under a Tariff Commission (TC) decision issued last year in Philippines.

Millers have increased marketing efforts in Africa and the Middle East to offset export losses in other markets.

Pasta

The pasta sector is one of the most dynamic and developed industries in Turkey, and domestic pasta consumption and exports have been increasing every year. The sector's capacity has increased with new investments in recent years. But the major concern of the industry is securing a continuous supply of raw material in MY2014. A shortage of durum wheat was the major challenge for the sector last year. Turkey has imported 490,000 MT of durum wheat since June 2014. Leading durum wheat suppliers are Mexico (228,412 MT), India (156,745MT), and Canada (44,927 MT)

Quantity of pasta exportation Turkey

MONTH

MY 2012/13

(MT)

MY 2013/14

(MT)

MY 2014/15

(MT)

June

45,678

55,660

61,328

July

43,299

63,469

59,198

August

38,231

47,746

55,824

September

44,594

57,218

64,786

October

38,775

51,498

55,987

November

46,075

63,075

53,859

December

50,757

61,137

57,718

Sub, Total Jun-Dec

307,410

399,802

408,701

January

52,307

72,104

49,194

February

52,692

61,064

March

58,927

60,939

April

60,740

70,424

May

68,745

62,120

MY TOTAL

600,821

726,455

675,000*

*forecast

African market increased ten times in six years. Benin, Angola, Togo are the main markets for Turkish pasta exports. But exports to those countries decreased in MY 2014/15. Turkish pasta producers lost slightly their market share in Africa. The Japanese market is very important to Turkish pasta producers, not only because of the value of exports but also because they consider this the most prestigious export market. Recently years BAE is another prestigious export market.

Major Turkish pasta export markets (June-January) (MT)

Countries

MY 2012/13

MY 2013/14

MY 2014/15

Angola

59,634

80,832

61,137

Benin

33,412

72,068

49,284

Iraq

34,180

37,345

41,234

Syria

939

16,571

34,254

Togo

40,322

26,688

26,464

Djibouti

12,914

16,493

21,012

Others

304,231

350,744

224,354

Total

451,452

600,741

457,895

Quantity of pasta exported in MY 2011/12, 2012/11 and 2013/14

MY 2011/12

MY 2012/13

MY 2013/14

Benin

33,412

72,068

102,550

Angola

59,634

80,832

77,900

Iraq

34,188

37,345

45,763

Togo

40,322

26,688

39,258

Syria

0,940

16,575

39,009

Others

282,977

367,313

421,975

Total

451,473

600,821

726,455

Turkish pasta production is expected to increase to 1,260,000 MT in MY 2014/15, due to domestic consumption and exports. Turkey is forecast to export 675,000 MT of pasta in MY 2014/15.

Total pasta foreign trade

Turkey: Pasta Foreign Trade Data

YEAR

IMPORTS

($1000)

IMPORTS

(MT)

EXPORTS

($1000)

EXPORTS

(MT)

MY 2011/12

6,014

2,631

320,316

451,473

MY2012

6,827

2,994

429,247

600,821

MY2013

11,642

4,519

510,457

726,455

MY2014*

3,025

8,272

457,738

314,967

*June 2014-January 2015

Stocks:

TMO has around 4.3 MMT of elevator capacity and is investing in modernizing its elevators. TMO is also leasing modern elevators from the private sector.

TMO and the Turkish Union of Chambers in Polatlı opened a licensed warehouse system in 2011 with 40,000 MT of grain storage capacity. Currently, 6 companies have about 275,000 MT of licensed warehouse capacity.

TMO and the private sector have approximately 2 MMT of stocks of wheat as they enter the new harvest. TMO has 285,000 MT of corn, 200,000 MT of barley, 45,000 MT paddy rice.

Policy:

The Turkish government authorized the Turkish Grain Board to import 4.2 million tons wheat, barley, rice and corn at a zero customs duty through a Cabinet of Ministers Decision published in the Official Gazette on April 19, 2014. In a typical year TMO would have stopped wheat sales (milling, pasta and biscuit) at the beginning of the domestic wheat and barley harvest. This is the first time TMO is selling barley during harvest period.

TMO began purchasing based on protein content for the first time in 2011. TMO announced their new purchasing policy before the MY 2015/16 harvest. TMO's purchasing policy is meant to encourage farmers to produce more quality wheat by offering a greater premium for higher protein content and lower pest damage. Forecasts on the new season have been hopeful and TMO is trying to open enough space for the new harvest to ensure sufficient silo space. TMO has prepared for a deficit by importing silo bags.

The GOT increased the agricultural support budget from 9.7 billion Turkish Lira (TL) in 2014 ($4.49 billion) to 10.1 billion TL ($4.1 billion) in 2015. Although the total level of support seems to have increased, the devaluation of the TL against US Dollar reduced Turkey's real level of support. Turkey offers supports for inputs based on area, premium payments for improved quality, and payments towards rural development.

Area-based supports for use of diesel, fertilizer, planting organic agriculture, certificated seed, hazelnut and tea represented 29 percent.

Premium payments represented 30.7 percent (2.92 billion TL in 2014 and 3.06 billion TL in 2015). Livestock supports represented 29.5 percent, which were 30.1 percent in 2014.

Rural development supports represented 5 percent of total support in 2015.

Although The GOT provided 12.2 billion in support to the livestock sector between 2003 and 2013, red meat prices remain high.

Food price based inflation is a big concern for Turkey. The Central Bank of Turkey projected food price inflation at 12 percent on January 28, 2015. The Turkish Consumer Price Index (TUFE) is 8 percent. The GOT has expressed concerns about the effect of inflation on food prices. Therefore, the GOT established a Committee to Evaluate the Food and Agricultural Product Market through a circular letter published in the Official Gazette in December 2014.

The committee consists of undersecretary of MINFAL, undersecretaries of ministries of Economy, customs, Commerce, development and Finance, treasury undersecretary, governor of central bank and president of Turkish Statistic Institution that will follow and evaluate food and agriculture markets. Committee will meet every 3 months and write a report about price fluctuations.

Inward Processing Regime

The Inward Processing Regime (IPR) is an export incentive system allowing Turkish manufacturers/exporters to obtain raw materials and intermediate unfinished goods that are used in the production of the exported goods without paying customs duty or being subject to commercial policy measures. Having granted IPR authorization, the owner of the IPR authorization is permitted to import the goods stated on authorization and export them after processing the imported goods. The basic endeavor of the IPR is to ensure the supply of materials at world market prices and enhance the competitiveness of Turkish exporters.

For 20 years Exporter Unions that consist of exporter companies and authorized by the Ministry of Economy have verified that the certificates were used within the scope of IPR following the company's export of qualified products.

In the recent times, however, there have been reports about a Ministry of Customs and Trade investigation into abuse of IPR system. Meanwhile, the Turkish Court of Accounts (Sayiştay) also criticized the system that the same people are same who use the certificates also validate their compliance.

With the notification 29201 published in the Official Gazette dated December 10, 2014, it is announced that effective from 1st January 2015 certificates will be validated by the Ministry of Economy instead of the Exporter Unions.

After that amendment some claim that new application would prevent abuse of the IPR system.

On the other hand some exporters are worried about possibility of increasing bureaucracy and waste of time.

Grain support system Turkey: Grain Support System

Grain support system Turkey: Grain Support System (TL and $/ha)

Types of Support

2013

2014

2015

Diesel Support

43 TL

46 TL

48.5 TL

$23

$21

$20

Chemical Fertilizer Support

55 TL

60 TL

66 TL

$29

$27

$27

Soil Analysis support

25 TL

25 TL

25 TL

$13

$11

$10

Grain Premiums Turkey: Grain Premiums (TL/MT)

Grain Premiums Turkey: Grain Premiums (TL and $/MT)

Products

2011

2012

2013

2014

2015

Wheat

50 TL

50 TL

50 TL

50 TL

50 TL

$30

$28

$26

$26

$20

Barley, Oats, Rye

50 TL

50 TL

50 TL

50 TL

50 TL

$30

$28

$26

$26

$20

Paddy Rice

100 TL

100 TL

100 TL

100 TL

100 TL

$60

$56

$52

$52

$41

Chick Peas, Lentils, Dry beans

100 TL

100 TL

100 TL

100 TL

100 TL

$60

$56

$52

$52

$81

Corn

40 TL

40 TL

40 TL

40 TL

40 TL

$24

$22

$21

$21

$16

The feed and livestock industries are concerned about high feed prices. Turkey's livestock sector has had a lot of new investment, including the import of live animals, which has increased the importance of access to forage crops. There is very limited pasture development and forage crop planting. The feed industry is dependent on soybean imports, corn by-products imports and bran from oilseed mills, wheat mills, and the cotton ginning industry.

Turkey Forage Crop Supports

Forage crop supports (TL and $/ha)

Products 2011 2012 2013 2014 2015

Products

2011

2012

2013

2014

2015

Alfalfa (irrigated)

1300 TL

1300 TL

500 TL

500 TL

500 TL

$774

$722

$262

$262

$203

Trefoil

900 TL

900 TL

400 TL

400 TL

400 TL

$536

$500

$210

$210

$162

Silage corn

550 TL

550 TL

750 TL

750 TL

750 TL

$327

$306

$394

$394

$304

Grain Tariff Rate Turkey:

Turkey: Grain Tariff rate

Product group

Products

EU

Bosnia Herzegovina

S. Korea

Others

Notes

Wheat

Spelt, common wheat and meslin (excl. seed)

130

0

130

130

200 USD CIF reference price

Durum Wheat

130

0

130

130

300 USD CIF reference price

Common wheat, Durum wheat and meslin seed

0

0

0

0

-

Barley

Barley Seed

0

0

0

0

White Barley (excluding seed)

130

0

130

Malting Barley (excluding seed)

130

0

130

130

Corn

Maize Seed

0

0

0

0

Popcorn, Unpopped, (excluding seed)

130

0

130

130

Other Corn

130

0

130

270 USD CIF reference price

Rice

Rice in husk for sowing

13

0

15

115

Round, medium, long grain rice in husk

34

0

34

34

Round, medium, long husked rice

36

0

36

36

Semi milled, wholly milled, broken rice

45

0

45

45

S&D WHEAT

Wheat

2013/2014

2014/2015

2015/2016

Market Begin Year

Jun 2013

Jun 2014

Jun 2015

Turkey

USDA Official

New post

USDA Official

New post

USDA Official

New post

Area Harvested

7,700

7,700

7,710

7,710

0

7,860

Beginning Stocks

2,295

2,295

2,889

2,889

0

2,339

Production

18,750

18,750

15,250

15,250

0

18,000

MY Imports

4,035

4,035

5,500

5,500

0

3,500

TY Imports

4,154

4,154

5,300

5,300

0

3,500

TY Imp. from U.S.

15

15

0

0

0

0

Total Supply

25,080

25,080

23,639

23,639

0

23,839

MY Exports

4,441

4,441

3,800

3,800

0

3,800

TY Exports

4,294

4,294

3,800

3,800

0

3,800

Feed and Residual

950

950

700

700

0

950

FSI Consumption

16,800

16,800

16,800

16,800

0

16,800

Total Consumption

17,750

17,750

17,500

17,500

0

17,750

Ending Stocks

2,889

2,889

2,339

2,339

0

2,289

Total Distribution

25,080

25,080

23,639

23,639

0

23,839

1000 HA, 1000 MT, MT/HA