Highlights

Total wheat production for Turkey is forecast at 17.5 MMT in MY2016/17. Barley production in Turkey is forecast at 4.75 MMT in MY2016/17, down 35 percent from the MY2015/16 estimate. Wheat products export reached a historic high in MY2015/16. Especially unirrigated fields were hit by the drought weather condition. Turkey completed the lentil harvest in June 2016. Total lentil production is forecasted 350,000 MT.

PRODUCTION

Wheat

Total wheat production is forecast at 17.5 MMT in MY2016/17. Harvest time is between mid-May and end of June in Turkey. Yields and quality are changing by regions and by fields due to irrigation and precipitation differences. Central Anatolia, Cukurova and some part of Southeast of Turkey, especially unirrigated fields, were hit by the drought weather condition. It is forecasted that yield losses will be reach 60 percent in some part of Konya in Central Anatolia where harvest will finish around the mid July, 2016. Increasing production in Thrace is not sufficient to compensate for losses of other regions.

Despite serious drought after sowing during November and December 2015, rainfall in May 2016 was significantly higher than the previous year throughout the whole country. Average rainfall in Thrace region in May 2016 was 58.6 mm. This amount of rainfall is about 50% percent more than the long term average for that region, and 131 percent more than last year. Due to excessive rain in May and June, weed problems were common in wheat fields. Although the wheat has high protein content, some energy concerns were reported in Thrace Region.

The first harvest in the Mediterranean coast started in the second week of May 2016. Cukurova region had yields between 15 kg/ha and 50 kg/ha (depending on irrigation) which was less than the long term average and last year.

Despite unirrigated areas such Araban, Yavuzeli, Nizip, overall the region of Gaziantep is having a good year in terms of yield and quality in Southeastern region. Farmers enjoyed the durum wheat price which was about 1,020 TL/Ton. Sunn pest problems were common problem in Batman, Diyarbakir and Suruc. Due to power grid infrastructure problems and frequent power cuts, some farmers complained that they could not irrigate their fields because they don't have a reliable supply of power for pumps during the drought season.

Barley

Barley is the traditional product of unirrigated high plateau regions in Central Anatolia and GAP Regions. Barley production in Turkey in MY2016/17 is forecast at 4.75 MMT, down 35 percent from the MY2015/16 estimate. The decrease is primarily due to severely declining yields as barley production in Central Anatolia was very affected by the drought as was the barley crop in southeast Anatolia region. The barley price increased dramatically and reached to 730 TL/Ton in June 2016, up 16 percent compared to last year. Barley consumption in MY 2016/17 is forecast at 5.4 MMT with a 500,000 MT cut from previous prediction.

Corn

Total corn production is forecast at 5.5 MMT in MY 2016/17. Except for Central Anatolia, planting area decreased due to high returns for cotton, vegetables and oilseeds. Disappointment for farmers on second crop corn returns was another reason. This will lead to a decrease in the area planted to corn in MY 2016/17. Air temperatures and moisture in Cukurova region are higher than normal in June which will result in the harvest starting two weeks early. After the GOT suspected that terrorist groups had used nitrate-based fertilizer to make bombs in Turkey, the GOT banned the sale of nitrate-based fertilizer on first week of June 2016 until February 2017. There are other widely available alternatives like urea and amonium sulfate, but these aren't preferred by farmers in terms of their content, and for some other alternatives, prices are very high in some regions. Some farmers are worried about yield losses because of a lack of affordable and available fertilizer.

The Southeast region's wheat harvest is nearly complete, so this region is now ready for the second crop corn planting. According to the news, some farmers in GAP region are concerned about power cuts which would impact irrigation and therefore they may decide not plant a second crop at all.

Rice

Post forecasts paddy rice production at 746,000 MT in MY 2016/17. Rice plantings are similar with last year due to favorable weather condition during spring. Rice planting started in May 2016 in Balikesir. Planting area increased about 1,200 ha in Gonen and Manyas compared to last year, which compensated for a similar decrease other parts of Turkey. Water levels in dams are better than previous predictions. Kammeo and Ronaldo seed varieties are popular this year among farmers compared to the usual go-to of Osmancik variety.

TRADE

Turkey imported about 3.7 MMT of wheat during the first eleven months of MY2015/16. Russia was the leading supplier with 2.8 MMT, followed by Lithuania (357,236 MT) and Canada (157,650 MT). Despite increasing wheat production in MY2015/16, wheat products export is the factor driving the wheat imports. Post revised the wheat import estimation at 4 MMT in MY 2015/16 due to TMO's strong sales for wheat product exporters after a record harvest.

Turkey imported about 240,000 MT of durum wheat during the same period in MY2015/16. Mexico was the main supplier with about 103,000 MT, followed by Canada (70,000 MT) and Russia (60,000 MT).

For MY 2016/17, wheat imports into Turkey are forecast at 4.75 MMT due to strong demand for high quality wheat from flour and pasta exporters. African counties were main export destinations for Turkish pasta exporters.

In June 2016, the Anatolian Hard Red Wheat (AKS) was about 890 TL/MT (301 USD/MT) at the domestic market. Last year, at the domestic market, the local AKS price was 800 TL/MT (298 USD/MT) in June 2015.

Wheat products export reached a historic high in MY2015/16. Turkey exported about 3,260,000 MT of wheat flour and 700,000 MT of pasta in MY2015/16. Iraq is the main customer with about 1.3 MMT, followed by Sudan (550,000 MT) and Syria (280,000 MT). Although Turkey exports flour to more than 110 different destinations, 64 percent of total exports went to these three countries.

Along with Turkey's neighboring countries, Sudan is continuing to be a driving force of Turkish exports. Turkey also exported 700,000 MT of pasta in MY2015/16. According to market sources, pasta producers have already signed contracts for importing 300,000 MT of durum wheat for MY2016/17. Turkey is continuing to invest in milling and pasta facilities with new technologies. The wheat bran price is 550 TL/MT on June 20, 2016, up 44% from a year before.

So far in MY 2015/16, corn imports have been very slow and are now forecast at 700,000, down 200,000 tons from the official USDA estimate due to record harvest and TMO's active role. In addition, Turkey is continuing to be a hub between the Black

Sea region and Middle East. It is estimated that more than 500,000 MT of corn are being transshipped coming from Russia and Romania.

Rice trade is weak due to poor demand in the retail and food service sector and transshipment compare to last years. When looking into the statistics, there are some differences between importer and exporter data regarding Turkish rice trade. The main reason is that Turkish importers store the rice in bonded warehouses during 2-3 months until they find buyers for the rice. This is in order to avoid advance payment of the 45 percent tariff and VAT.

Contrary to previous years, Libya, Jordan and Syria are no longer main destinations for Turkish rice exporters. In terms of re-export, Indian-origin long grain rice is popular in Iraq market.

Despite Turkish consumer's taste preference, Turkey has imported low quality rice in recent years because of costs. Some rice companies have been blending long grain Indian rice, which seems like medium-grain rice, with Osmancik varieties (which have different cooking and flavor characteristics) to have better prices, but this creates some consistency and quality problems. After devaluation of the Turkish lira compared to the dollar, U.S. rice prices have not been attractive for Turkish importers. But traders are optimistic on new contracts with the help of decreasing U.S. rice prices in recent weeks. TMO has around 1.5 MMT of wheat, 0.5 MMT of Barley and 0.8 MMT of corn stocks as of June 2016. TMO has not announced a procurement price as of 21 June 2016 yet but it is expected that TMO will procure 1.5 MMT of wheat in MY 2016/17.

Lentils

This year's Lentil harvest will be completed at the end of June. Total lentil production is forecasted at 350,000 MT, up ten percent from MY2015/16 estimate due to a increase of ten percent in planting area. Traditionally red lentil grows in unirrigated areas in GAP region. With the help of new government support for lentil production announced in 2015, planting area increased in Diyarbakir, Bismil and Batman. General character of the harvest is high yield and poor quality. Heavy rains in the spring negatively affected the quality of the lentil crop in some fields in the region. Yields vary between 0.8 MT/ha and 2 MT/ha.

Wheat Market Begin Year Turkey

2014/2015

2015/2016

2016/2017

Jun 2014

May 2015

Jun 2016

USDA

Official

New

Post

USDA

Official

New

Post

USDA

Official

New

Post

Area Harvested

7710

7710

7860

7860

7815

7815

Beginning Stocks

3112

3112

2750

2524

3050

2524

Production

15250

15250

19500

19500

17500

17500

MY Imports

5947

5947

4300

4000

4500

4750

TY Imports

5960

5960

4300

4000

4500

4750

TY Imp. From U.S.

0

0

0

0

0

0

Total Supply

24309

24309

26550

26024

25050

24774

MY Exports

4059

4062

5500

5500

5000

5500

TY Exports

4134

4136

5500

5500

5000

5500

Feed and Residual

700

700

1200

1200

1000

1000

FSI Residual

16800

16800

16800

16800

16800

16800

Total Consumption

17500

17500

18000

18000

17800

17800

Ending Stocks

2750

2524

3050

2524

2250

1474

Total Distribution

24309

24086

26550

26024

25050

24774

Corn Market Begin

Year Turkey

2014/2015

2015/2016

2016/2017

Sep 2014

Sep 2015

Sep 2016

USDA

New

USDA

New

USDA

New

Official

Post

Official

Post

Official

Post

Area Harvested

550

550

620

620

570

570

Beginning

Stocks

644

644

712

712

762

862

Production

4800

4800

6200

6200

5500

5500

MY Imports

2364

2364

900

700

1500

1500

TY Imports

2377

2377

900

700

1500

1500

TY Imp. From US

13

13

0

0

0

0

Total Supply

7808

7808

7812

7612

7762

7862

MY Exports

46

46

200

100

100

100

TY Exports

66

66

200

100

100

100

Feed and

Residual

6000

6000

5800

5600

6000

6000

FSI Consumption

1050

1050

1050

1050

1100

1100

Total Consumption

7050

7050

6850

6650

7100

7100

Ending Stocks

712

712

762

862

562

662

Total

Distribution

7808

7808

7812

7612

7762

7862

(1000 HA) ,(1000 MT)


Barley

Market Begin

Year

Turkey

2014/2015

2015/2016

2016/2017

Jun 2014

May 2015

Jun 2016

USDA

New

USDA

New

USDA

New

Official

Post

Official

Post

Official

Post

Area Harvested

3400

3400

3400

3400

3400

3400

Beginning Stocks

899

899

332

332

907

856

Production

4000

4000

7400

7400

5400

4750

MY Imports

792

792

100

25

300

300

TY Imports

332

332

50

25

400

400

TY Imp. From U.S.

0

0

0

0

0

0

Total Supply

5691

5691

7832

7757

6607

5906

MY Exports

9

9

25

1

25

10

TY Exports

10

10

25

1

25

10

Feed and Residual

4500

4500

6000

6000

5000

4500

FSI Consumption

850

850

900

900

900

900

Total Consumption

5350

5350

6900

6900

5900

5400

Ending Stocks

332

332

907

856

682

496

Total Distribution

5691

5691

7832

7757

6607

5906


Rice, Milled

Market Begin Year

Turkey

2014/2015

2015/2016

2016/2017

Sep 2014

Sep 2015

Sep 2016

USDA

New

USDA

New

USDA

New

Official

Post

Official

Post

Official

Post

Area Harvested

95

95

98

98

96

98

Beginning Stocks

245

245

217

217

122

122

Milled Production

460

460

500

500

490

500

Rough Production

687

687

746

746

731

746

Milling Rate

6700

6700

6700

6700

6700

6700

MY Imports

317

317

200

200

275

275

TY Imports

256

270

200

200

275

275

TY Imp. from U.S.

133

133

0

0

0

0

Total Supply

1022

1022

917

917

887

897

MY Exports

25

25

25

25

25

25

TY Exports

28

28

25

28

25

25

Consumption and

780

780

770

770

750

750

Ending Stocks

217

217

122

122

112

122

Total Distribution

1022

1022

917

917

887

897