Highlights

Following the completion of the wheat harvest, Post has revised the wheat production forecast down to 17.25 MMT in MY 2016/17. The first corn crop harvest is almost completed and the second crop corn harvest has begun in some regions. Post's corn production forecast is 5.5 MMT. The paddy rice harvest has just begun; paddy rice production forecast is 746,000 MT. Barley production is forecasted at 4.75 MMT. Licensed Warehouse capacity is increasing due to the Government of Turkey's (GOT) encouragement of investment in this sector.

PRODUCTION

Wheat

All of Turkey's wheat harvest is completed. Wheat yield in Central Anatolia was lower than was expected. Due to serious drought in Central Anatolia, low yield in general was very common, which lead Post to revise its forecast down. Total wheat production is forecast at 17,25 MMT in MY2016/17.

Barley

Barley production in Turkey in MY2016/17 is forecast at 4.75 MMT, down 35 % from the MY2015/16 estimate. The decrease is primarily due to severely declining yields. Barley production in Central Anatolia was very effected by the drought. Barley price in the domestic market is at about 725 TL/MT in September 2016, which is 20 percent higher compared to last year.

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 last year was another reason. This will lead to a decrease in the area planted to corn in MY 2016/17. Irrigated wheat land will be a luxury for most of Turkey but corn will gain irrigated land especially in Central Anatolia. Early planting, air temperatures and moisture in Cukurova were higher than normal during summer, which was caused harvest to start 2 weeks early.

First crop corn harvest is almost completed. Yield is just under the last year level in the Cukurova region. In the Cukurova region, yield is estimated less than5% lower than MY 2015/16. But in some areas of Cukurova, like Osmaniye, farmers are happy with high yields which are 5-10 percent more than last year. Farmers are happy with yields in Batman and Diyarbakir in Southern East Region also. Corn was planted in June in Nusaybin, Derik and Kiziltepe as a second crop in Southern East Region. Despite electricity problems which have affected irrigation, yield expectations are high.

As of the third week of September, only 15 percent of harvest is completed. Post forecasts paddy rice production at 746,000 MT in MY 2016/17. Rice planting area is similar with the last year due to favorable weather conditions during spring. 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.

Edirne region produces more than 50 percent of country's paddy rice production. Harvest started in the first week of September in Ipsala. Paddy rice area decreased due to last year's low price and low water level in the dams which forced farmers to reduce planted area. Paddy rice area decreased around 5 percent in the region. The major problem affecting yield was the prevalence of red wild weeds.

According to first harvested area, yield was very high in some regions like Ipsala - yields reached 700-750 kg/da. Kammeo, Luna and Ronaldo seed varieties are popular among farmers instead of Osmancik this year. Overall yield in the region is 700 kg/da with 60 percent milling efficiency. Some farmers started to plant Quinoa in fallow land this year.

Corum region harvest started in the second week of September in Kizilirmak region. The region produces 7-9 percent of Turkey's paddy rice production. Yield was close to the long term average at 600 to 700 kg/da. Osmancik 97 is the major variety in the region. Çankırı region produces around 15 percent of Turkey's total paddy rice production. Yield is lower than expected, at around 600 kg, due to temperature differences, but milling rates are better than last year. Major varieties there are Edirne, Osmancik and Baldo.

Paddy rice prices began at 1,400 to 1,500 TL/MT and then dropped to 1,200-1,300 TL/MT. Farmers were happy at the beginning of harvest but now they are concerned about further decreases. The locally harvested and milled Osmancik rice price is 2,700 TL/Ton at the beginning of September 2016, which is just under last year's price. TMO has not announced procurement price yet, but farmers are pushing TMO to intervene to the market in October. It is highly possible that TMO will announce a procurement price for paddy rice.

TRADE

Although wheat production increased in MY2015/16, wheat products export was the driving factor of wheat imports. Turkey imported about 4 MMT of wheat in MY2015/16. Russia was the leading supplier with 2.9 MMT, followed by Lithuania (422,726 MT) and Canada (168,046 MT) Turkey imported 500,000 MT of wheat during the first two months of MY 2016/17.

Turkey imported about 277,000 MT of durum wheat in MY2015/16, of which Mexico is the main supplier with about 117,000 MT, followed by Canada (80,000 MT) and Russia (75,000). Turkey imported 170,000 MT of durum wheat during the first two months of MY 2016/17 of which 133,000 MT were Mexican wheat due to their competitive price. African counties were main export destinations for Turkish pasta exporters.

For MY 2016/17, wheat imports into Turkey are forecast at 5 MMT due to strong demand for high quality wheat from flour and pasta exporters.

In September 2016, the Anatolian Hard Red Wheat (AKS) was about 980 TL/MT ($332 USD/MT) at the Konya Commodity Exchange. Last year, at the domestic market, the local rice price was 950 TL/MT ($311 USD/MT) in September 2015.

For MY 2016/17, total wheat product exports are forecast at 5.6 MMT to remain such a high level assuming to continue a strong demand from major consumers. Turkey exported about 490,000 MMT of wheat flour during the first two months of MY 2016/17, up 13 % from a year before.

Turkey has imported a total of 560,000 MT of corn during the eleven months of MY2015/16. Corn imports have been very slow due to record harvest, TMO's active role and slowdown in poultry export. In addition, Turkey is continuing to be a hub between Black Sea region and Middle East andit is estimated that more than 500,000 MT of corn are being transshipped coming from Russia and Romania.

Post has revised the corn consumption estimation to 6.55 MMT in MY 2015/16, which is 300,000 MT down from the previous estimation, due to decreasing demand from feed sector. Feed sector demand for corn was possibly affected from the availability other corn co-products like DDGS and corn gluten meal as well as decreasing demand for feed, partially due to reductions in poultry exports.

Turkey imported 181,000 MT of rough rice during the first eleven months of MY 2015/16, of which 67,000 MT were US rough rice due to decreasing price in USA. Other suppliers are Russia and Bulgaria with 59,500 MT and 13,271 respectively. Turkey imported 67,421 MT of rice during the same period. Main suppliers are Italy (21,198 MT), India (20,262 MT) and Greece (13,933 MT).

The Turkish Grain Board (TMO) announced 2016 wheat procurement prices on June 28, 2016. TMO announced the intervention price for Anatolian Hard Red Milling (AKS) Wheat at 910 TL/MT ($313/MT), and 1,000 TL/MT ($344/MT) for durum wheat. Farmers can get up to 7 percent more according to quality (bugs ratio and protein). Price premiums and supports reach 121 TL per ton for MY2016/17 (around $40/MT). Contrary to last year, TMO did not announce a procurement price for barley for MY2016/17.

The Turkish Grain Board (TMO) announced 2016 corn procurement price on August 26, 2016 which is 740 TL/MT ($245/MT) - it was 725 TL/MT last year. TMO has bought about 2.6 MMT of wheat and 910,000 MT of corn since the intervention price announcement. Corn price was about 710-720 TL/MT just before TMO announcement in domestic market.

Licensed Warehouse Storage

Licensed Warehouse (LW) capacity is increasing due to the Government of Turkey (GOT) encouraging the private sector to invest in new warehouses. With the help of new LW, the GOT aims to reduce TMO's major role in the grain market and integrate specialized Commodity Exchanges with financial markets. The GOT is working on a well-functioning Licensed Warehousing, Warehouse Receipts System (WHR) transactions for delivery on agricultural products and futures markets in Turkey with the help of the commodity exchanges. As a first step, wheat Future Contracts with physical delivery through Electronic Warehouse Receipts was launched upon signing of a cooperation agreement between Borsa İstanbul and Konya Commodity Exchange in February 2016.

There were only seven LW and total capacity of LW for grain, pulses and oilseed was 415,000 MT in 2015. In 2016, seven new LW were constructed with a total new storage capacity of 300,000 MT by September. It is forecasted that the licensed warehouse capacity in Turkey will reach 5 MMT in a few years.

Production Supply and Distribution Tables

Wheat

Market begin Year

2014/2015

June

2015/2016

May

2016\2017

June

Official USDA

New Post

Official USDA

New Post

Official USDA

New Post

Area Harvested

7710

7710

7860

7860

7815

7815

Beginning Stocks

3112

3112

2750

2750

3098

2716

Production

15250

15250

19500

19500

17500

17250

MY Imports

5947

5947

4382

4000

5000

5000

TY Imports

5960

5960

4347

4000

5000

5000

TY Imp. from US

0

0

0

0

0

0

Total Supply

24309

24309

26632

26250

25598

24966

MY Exports

4059

4059

5534

5534

5600

5600

TY Exports

4134

4134

5609

5609

5600

5600

Feed and Residual

700

700

1200

1200

1000

1000

FSI Consumption

16800

16800

16800

16800

16800

16800

Total Cons.

17500

17500

18000

18000

17800

17800

Ending Stocks

2750

2750

3098

2716

2198

1566

Total Distribution

24309

24309

26632

26250

25598

24966

Barley

2014/2015

2015/2016

2016/2017

Market Begin Year

Jun 2014

May 2015

Jun 2016

Turkey

USDA Official

New Post

USDA Official

New Post

USDA Official

New Post

Area Harvested

3400

3400

3400

3400

3400

3400

Beginning Stocks

899

899

332

332

961

872

Production

4000

4000

7400

7400

4750

4750

MY Imports

792

792

129

41

300

200

TY Imports

332

332

80

41

400

200

TY Imp. from U.S.

0

0

0

0

0

0

Total Supply

5691

5691

7861

7773

6011

5822

MY Exports

9

9

0

1

25

10

TY Exports

4

10

0

1

25

10

Feed and Residual

4500

4500

6000

6000

4600

4600

FSI Consumption

850

850

900

900

900

900

Total Consumption

5350

5350

6900

6900

5500

5500

Ending Stocks

332

332

961

872

486

312

Total Distribution

5691

5691

7861

7773

6011

5822


Corn2014/20152015/20162016/2017
Market Begin YearSep 2014Sep 2015Sep 2016
TurkeyUSDA OfficialNew PostUSDA OfficialNew PostUSDA OfficialNew Post
Area Harvested550550620620570570
TY Imports2377237790070015001500
TY Imp. from U.S.13130000
Total Supply780878087812761277627962
MY Exports4646200100100100
TY Exports
66
66200100100100
Feed and Residual600060005800550060006000
FSI Consumption105010501050105011001050
Total Consumption705070506850655071007050
Ending Stocks712712762962562812
Total Distribution780878087812761277627962
Rice, Milled2014/20152015/20162016/2017
Market Begin YearSep 2014Sep 2015Sep 2016
TurkeyUSDANewUSDANewUSDANew
OfficialPostOfficialPostOfficialPost
Area Harvested959598989898
Beginning Stocks245245217217127122
Milled Production460460500500500500
Rough Production687687746746746746
Milling Rate (.9999)670067006700670067006700
MY Imports317317250200300300
TY Imports256270275200300300
TY Imp. from U.S.1331330000
Total Supply10221022967917927922
MY Exports252550252530
TY Exports282850282530
Consumption and780780790770780770
Ending Stocks217217127122122122