“The import ban on wheat imposed by TMO until October 15 has been an extremely challenging period for our sector. The ban on imports and the uncertainty in wheat prices have created serious difficulties in maintaining our leadership position in the global market. During this period, our exports have seen an average decrease of 40%. We hope for a swift resolution to restore our export successes. We urge the authorities to support us by providing solutions to ensure we obtain wheat at global prices, so we do not lose our export markets.”

Haluk Tezcan, President of the Turkish Flour Industrialists Federation (TFIF)

For the past decade, Turkey has been at the forefront of global wheat flour exports. Turkish flour producers account for approximately 30% of the world’s wheat flour trade with around 4 million tons of exports. One of the key factors behind Turkey’s leadership in exports is its logistical and pricing advantages due to its proximity to major wheat trading countries like Russia and Ukraine, as well as to importing countries. The sector has been able to compete with global prices through import activities under the inward processing regime. However, the Turkish Grain Board’s (TMO) import ban on wheat until October 15 has led to a significant decline in exports and market losses for the sector. We discussed this issue with Haluk Tezcan, President of the Turkish Flour Industrialists Federation (TFIF).

TFIF President Haluk Tezcan emphasizes the importance of securing key markets for the sector and requests that the government provide wheat to flour producers at global prices to prevent losing these markets to competitors. Here are President Tezcan’s responses to our questions: 

Dear Mr. Tezcan, we have completed a challenging season. How did this year go from the perspective of grain markets? Could you evaluate Turkey’s 2024 grain season?

We faced 2024 with many uncertainties and challenges in the milling sector. We finished the season with the same stress, difficulties, and unknowns. Overall, the 2024 grain markets have provided less yield compared to last year. Compared to other years with average yields, we had a standard harvest period. Looking at the results of this harvest period, I can say that it was not like the years we struggled with drought and that we produced enough wheat for ourselves. We estimate that we completed the season with a wheat harvest of around 20 million tons.

In 2023 and 2024, global markets started with a rise, but continued to decline due to low supply. There is also a significant challenge in combating inflation worldwide. Especially after the COVID-19 period, rising markets, climate change, drought, and the subsequent rise in markets due to the Russia-Ukraine war have begun to normalize, and global pricing has adjusted to appropriate levels.

Entering 2024, our TMO and Ministry of Agriculture halted import permits under the inward processing regime from June 15 to October 15. During this period, global prices (for 12.5% protein wheat) decreased from around $260 to $220. Globally, wheat production continued at its normal pace, and there have been no issues with stocks. This is a positive development. We consider it a significant opportunity for Turkey to enhance its competitive edge in exports.

APPROXIMATELY 20 MILLION TONS OF YIELD ACHIEVED

What was your wheat yield forecast, and how does it compare to the actual results?

Our national forecast for wheat yield was around 20 million tons, and this is roughly the amount that has been realized.

How do you evaluate the purchase prices announced by the Turkish Grain Board for the future of wheat?

The Ministry of Agriculture is conducting very serious work on this issue. The reality is that the wheat prices set are not very satisfying for our farmers. The base price set is influenced by market conditions, and in many regions, wheat has been sold above this base price. With the support of the sector, we believe that farmers will continue to produce wheat in the future.

How should we interpret the recent trend of farmers returning to wheat cultivation?

Recently, the impact of drought, water issues in irrigable lands, climate change, and various other challenges have led our farmers to focus more on wheat production. This is a highly encouraging development for both our country and the sector. We believe that when wheat cultivation is undertaken domestically, it will increase yields and help resolve various issues over time. Thus, we view this trend very positively. Implementing contract farming and basin applications is strategically important for wheat cultivation, and we believe these production models will enhance efficiency by giving farmers new perspectives on wheat cultivation.

WE HOPE FOR A SWIFT RESOLUTION TO THE OBSTACLES FACING WHEAT EXPORTS

How do you evaluate the Turkish Grain Board’s (TMO) wheat import ban until October 15?

This has been a highly challenging period for our sector. The ban on imports has created significant difficulties in maintaining our leading position in the global market due to the uncertainty of wheat prices. During this period, we have experienced an average decline of around 40% in our exports. We hope for a prompt resolution to the obstacles and a reopening of opportunities for our export success.

As the umbrella organization of the sector, what would you like to say about the over 30% decline in Turkey’s wheat flour exports over the last two months?

Flour is a strategic product, especially in the countries where we export. Competitor countries have started to send products to the markets we have previously secured with our quality and price advantage. The pricing of the countries we compete with in export markets is lower than ours due to commodity prices abroad, making it easier for them to access our markets. From this perspective, we are experiencing a highly challenging process. It is crucial for us that this situation is resolved as soon as possible. We have observed that the 30% decline in our exports has risen to 40% as of August. Continued decline would mean more difficulties for the sector and challenges in re-entering our current markets. Therefore, we request that government officials urgently provide solutions to prevent the loss of our export markets and support us in procuring wheat at global prices.

What would you like to say about your conference titled “Post-Harvest Grain Markets and Sectoral Reflections,” which will be held this year in Antalya?

In this valuable conference, we will cover a range of topics. The 2024 harvest, export bans, and the opportunities and challenges we face will be thoroughly assessed. It will be a significant meeting where we discuss the past and future of our process with government officials, representatives from the Ministry of Agriculture, Foreign Trade, and the General Directorate of Exports, private sector representatives, NGOs, and our esteemed flour producers.

Do you have anything to add?

As of today, the Turkish Grain Board (TMO) has announced wheat sale prices. Through our initiative, the TMO General Manager and the Minister of Agriculture have responded to the demands of our flour producers. Unlike previous years when sales began on October 15, this year they have opened in September for the first time. This development has made us happy. The resolution of this uncertainty and the assurance of our industry’s access to raw materials have greatly relieved us. The announced prices align with the expectations of our sector. We have had the opportunity to witness the implementation of the government’s decisions in the fight against inflation. In this context, we anticipate the 2024-2025 season will be one of abundance, prosperity, and beauty.