Production

Post reduces MY 2014/2015 rice production 20,000 MT to 460,000 MT on low yields. Paddy rice harvest began in the Edirne and Gönen regions on September 9, 2014. All of Turkey's paddy rice harvest is completed. The domestic harvest milling rate is around 67 percent. Production was characterized by low yields and better milling rates due to heavy rains, weeds, and late planting. However, the yield was very high in some regions like İpsala, where farmers planted on fallow land.

Trade

The industry has struggled with several problems recently. High value-added tax on rice is still a significant policy problem in terms of unfair competition between millers. The tax on paddy rice is 1 percent, whereas the tax on milled rice is 8 percent. However, the Prime Minister announced on December 9, 2014, that the GOT plans to reduce the value-added tax rate from 8 percent to 1 percent (the same as for paddy rice). The GOT has not set the date when the reduction will take place. This change is expected to have two positive outcomes for the sector. First, the tax abatement may discourage unregistered rice milling. Second, the abatement will likely reduce the retail price.

Although a tax reduction is expected to benefit the sector, Turkish millers and retailers continue to face problems. There are nearly 200 paddy rice factories in Turkey, but they can use only 33 percent of their capacities, resulting in substantial production inefficiencies. Retailers also face pressure from afternoon TV programs that recommend reduced rice consumption for a healthy diet. Meanwhile, retailers harm consumer trust through efforts to save money by blending varying qualities of rice.

Turkish paddy rice production is insufficient to meet domestic consumption requirements. Although the U.S. has been the biggest supplier for several years, Calrose rice, which is favored by Turkish consumers, has become too expensive due to soaring prices in California. The FOB price of Calrose variety rice is $1,300/MT, and has a 45-percent tariff. Jupiter variety rice is an U.S.-origin alternative, but importers are concerned about the risk of possible GE detections.

Turkey: Rice Imports, MY2013

Countries

Quantity (MT)

United States

172,872

India

67,338

Russia

39,909

Portugal

32,792

Italy

24,735

Bulgaria

19,066

Thailand

11,219

Others

46,001

Total

413,932

Market

TMO has not procured domestic paddy rice since late 2013. Farmers are expecting prices to improve, so transaction volume was low in the market after harvest in October and September. TMO announced on October, 23 and December 10, 2014, that TMO is monitoring the sector and that TMO may sell paddy rice or milled rice to reduce market prices. TMO imported 35,000 MT of paddy rice and 33,000 MT of rice in late 2013, and opened their stocks to sell on the retail market under their brand in early 2014. TMO has already imported 8,000 MT of rice and 40,000 MT of paddy rice after the harvest in 2014. The bulk price of Osmancık variety rice increased from 2,300 TL/MT ($1,161/MT) in October 2013 to 3,050 TL/MT ($1,281/MT) in January 2015.

The TMO retail price for Osmancık and Calrose varieties are 2.7 TL/kg ($1.13/kg).

PSD Rice, Milled

2012/2013

2013/2014

2014/2015

Market Begin Year

Sep 2012

Sep 2013

Sep 2014

Turkey

USDA Official

New post

USDA Official

New post

USDA Official

New post

Area Harvested

103

103

98

98

95

95

Beginning Stocks

270

270

194

194

245

245

Milled Production

483

483

500

500

480

460

Rough Production

721

721

746

746

716

687

Milling Rate (.9999)

6,700

6,700

6,700

6,700

6,700

6,700

MY Imports

235

235

341

341

300

300

TY Imports

234

234

350

350

300

300

TY Imp. from U.S.

86

86

110

110

0

0

Total Supply

988

988

1,035

1,035

1,025

1,005

MY Exports

34

34

20

20

30

30

TY Exports

8

8

20

20

30

30

Consumption and Residual

760

760

770

770

780

780

Ending Stocks

194

194

245

245

215

195

Total Distribution

988

988

1,035

1,035

1,025

1,005

1000 HA, 1000 MT, MT/HA