We witnessed the wheat harvest in Mardin, the ancient city of Mesopotamia's fertile lands and one of Turkey's top-quality grain production centers. We had the opportunity to evaluate the sector with farmers and flour industrialists in a harvest program organized by Taban Gıda in Mardin. Farmers in the region, who had a difficult time due to the severe drought last year, are happier this harvest season. Especially in durum wheat production, Southeastern Anatolia Region has an important place in Turkey.

Wheat harvest started in strategic regions considered as the grain production center of Turkey. It is a matter of curiosity how the climatic effects will affect the harvest and how the yield will be. Will the harvest in Çukurova, Southeast Anatolia, Antalya and Söke make the farmers happy after the high purchase price given by the Turkish Grain Board (TMO)? We had the opportunity to observe and evaluate the wheat harvest in Mardin with Hasan Hacıhaliloğlu, CEO of Taban Gıda, the sector leader in the domestic wheat supply market in Turkey.

The rapid increase in exchange rates and the Russia-Ukraine war left their mark on the post-pandemic period. New crises have completely changed the agenda and course of the grain industry, which is already fighting against climate change. The war between the two giant grain-producing countries caused all countries to reshape their economic and political strategies. Taban Gıda reached a grain trade volume of over 2 million tons in 2021, which was a difficult year for all sectors, and closed the year with a turnover of over 4.5 billion TL. Having strong commercial relations with Russia and Ukraine; carrying out transit trade to nearly 20 countries in 5 continents and being the leader of the wheat supply market in Turkey, Taban Gıda has grown by more than 50 percent in 2021 compared to the previous year, thanks to its investments.

Taban Gıda, which has established its own fleet by purchasing 3 dry cargo ships with a total investment of 25 million dollars within the body of Vivalon AG, makes new investments by analyzing various risks and opportunities created by global crises such as global climate change, pandemics and logistics bottlenecks. Having decided to establish a silo plant in Samsun, Turkey's largest port in the Black Sea region, and a flour factory in Russia, Taban Gıda aims to carry its success to the global.

“WE TRADED 2.5 MILLION TONS OF WHEAT”

 Stating that global export of wheat amounted to nearly 200 million tons annually, “Taban Gıda meets more than 1 percent of this figure. Last year, we traded 2.5 million tons of wheat. This year looks like it will be a much better year for us. We want to get a share of at least 5 million tons from the world wheat trade. Our transit trade volume is increasing exponentially every year. We expect our transit trade volume, which was 350 thousand tons in 2021, to be over 1 million tons this year,” Hacıhaliloğlu says. “We aim to increase our transit trade turnover, which was 150 million dollars in 2021, to over 500 million dollars by the end of this year. In addition, we plan to gain a foothold in the feed raw materials market, especially in the domestic market. We are in a very strong position in the West African market. This year, we aim to grow in the European market and gain a stronger position in the Asian market. We will be a global player.”

Hasan Hacıhaliloğlu expects a higher wheat yield in Turkey this season compared to previous years. “There is a 10-15% difference between our estimates and the Turkish Statistical Institute. TurkStat expects a wheat harvest of 19,5 million tons for this season. However, we estimate the yield to be around 17 million tons. This is also the expectation in the USDA reports. TurkStat corn yield forecast seems more accurate. We are above the world average in corn yield. Corn has a higher production cost than wheat, but farmers earn more money from corn thanks to the high yield. For this reason, wheat cultivation areas in Turkey are shifting to corn.” 

‘TMO’S WHEAT PRICE DECISION IS CORRECT'

Hacıhaliloğlu also commented on the wheat purchase price announced by the Turkish Grain Board. “This year, we did not expect a price below 6,500 TL and TMO announced a purchase price of 7,050 TL with the premium. This has been a lifeline for the industry. Considering that the 1,000 TL premium will be given in the fall, the payment time can be criticized, but the highest purchase price in dollar was given. We approached the world average of 420 dollars per ton in wheat price. This purchase price may also increase the rate of wheat planted areas next year.”

Underlining that there is no wheat availability problem in Turkey, “Our country imports approximately 10 million tons of wheat every year. About 2.5 million tons of this amount is for domestic consumption. There is no problem of not being able to find or supply wheat and corn in Turkey. The required amount can be easily obtained from Russia, but the costs may remain high.” he says.

Stating that they are trying to protect themselves from price fluctuations by taking a position especially during the harvest periods when the supply is the highest, Hasan Hacıhaliloğlu says, “First of all, the country's production must meet the consumption. It seems very difficult for Turkey to achieve the supply-demand balance. If Turkey works to increase wheat cultivation areas and increase productivity, it will become very advantageous in meeting its own needs in the coming years. In the coming period, I think that we can reach the grain exporter position again with the digitalization steps in agriculture and the effective use of these instruments. First of all, it is necessary not to leave uncultivated agricultural land. When smart farming practices are applied, Turkey's soils will see the best point in productivity. Farmers turn to corn because it has higher yields and therefore higher earnings. There is a serious decrease in the wheat sowing areas in Turkey. There is a shift towards cotton in the Şanlıurfa region and oilseeds in the Black Sea region.” 

  UKRAINE HARVEST WILL BE DEFINITIVE

Annually 60-70 million tons of grains and oilseeds are produced in Ukraine. The country exports nearly 20 million tons of wheat and 10 million tons of corn annually. “There is already a loss of 30 percent in wheat planting areas in Ukraine due to the war. Corn was planted in May and compared to the same period of the previous year, the planting rate remained at 50 percent below. One of the biggest problems is that the ports are not operating in Ukraine. Putting aside the war environment for harvesting, it is very difficult for Ukraine to find fuel at affordable prices and to deliver its grain to the world markets. If Ukraine cannot harvest, a much worse scenario awaits the world,” warns Hacıhaliloğlu.

'RUSSIA HAS NO PROBLEM IN SELLING ITS WHEAT' 

Hasan Hacıhaliloğlu also comments on Russia’s grain exports: “Russia does not have a problem with selling its grain. Assuming that Russia will export 40 million tons of wheat this season, it already sells 10 million tons of it to Turkey. Most recently, they made an agreement with Iran for the sale of 5 million tons of wheat. Egypt also imports as much Russian wheat as Turkey. In other words, Russia reaches a wheat export figure of 25 million tons with only three countries. When we include China and other countries around it, Russia has no problem in selling its grain. Russia has a strong hand in this matter and uses it as a trump card. If necessary, Russia pours 10 million tons of wheat into the sea and tries to bring the world to its knees. Russia is in the top three in the world not only in wheat but also in many commodities, and this strengthens Russia's hand.”

Taban Gıda CEO’su Hasan Hacıhaliloğlu ile birlikte Mardin’de buğday hasadına katıldı.

“I think the rhetoric about opening a grain corridor in the Black Sea to export Ukrainian grain is optimistic. If the export of grain from Ukrainian ports will be made under Russian control, the world will not allow such a trade. And if this trade is not under Russian control, Moscow will not allow it. On the other hand, the ports are not usable because they are damaged. These ports need to be repaired. There is no problem with shipments from Russia. However, there are different problems in this region. For example, the insurance of the ships transporting from Russian ports cannot be made because it is considered risky.”

LONG-TERM POLICIES STRENGTHEN TURKEY'S HAND

The COVID-19 pandemic and the Russia-Ukraine war showed that it is very important for countries to produce self-sufficiently, especially in food. Turkey has fertile lands in terms of wheat quality. The pandemic and the Russia-Ukraine war showed that it is important for countries to be self-sufficient in food and agricultural production. Turkey has fertile lands in terms of wheat quality. Underlining that Turkey is also in a strong position in terms of soil cultivation and seed quality, Hacıhaliloğlu, comments: “I think the Russia-Ukraine crisis will carry Turkey to an important point in the future. Thanks to its geographical location, our country will have critical importance in the transit trade network. If Turkey makes long-term plans for agricultural policies and plans agricultural incentive policies in favor of producers by using fertile agricultural lands correctly, it can gain a strong position in the world food market in the future. As of today, Russian wheat is about 40 dollars below European prices. Turkey is the largest flour exporter in the world and the second in the world after Italy in pasta export. When we consider other items, I think that Turkey will gain from this trade… With the increasing world population, the need for food and grain is also increasing. We need to seize all the opportunities at our disposal to meet these needs. We can solve this by digitizing agriculture. We need to take more planned and stronger steps in this regard. The most profitable product should be planted in the right region. If the right crop is planted on the right land as needed, the supply-demand balance and therefore the right price will come about. Thanks to digitalization, agricultural lands will be used more effectively and production will be made according to needs. This will increase productivity in agricultural production. Thanks to sustainable agriculture, we will leave healthier lands to future generations. This should be one of our biggest responsibilities towards the future.” 

‘WE CAN EXPORT SOUTHEASTERN DURUM WHEAT AND IMPORT BREAD WHEAT’

Expressing that there are very large and valuable lands in Turkey, Hasan Hacıhaliloğlu says, “We should encourage the farmer to cultivate his land and switch to contract farming practices. Our lands will become much more productive with smart agricultural practices. If the right crop is planted on the right land as needed, the supply-demand balance and therefore the right price will come about. For example, the world's best durum wheat is produced in Southeastern Anatolia, but its export is not allowed. When we allocate enough for ourselves, export the rest with the right methods and buy bread wheat in return, our country will increase its income by 50 percent.” 

Hacıhaliloğlu also speaks about the future targets of Taban Gıda: “We predict that we will grow very seriously in transit trade. Harvest season (June-July) is more decisive for us. The most active period for us is between July and November. We will reap the fruits of 2022 in this period. The effective operation of our own ships now provides an increase in our trade volume. Feasibility studies have been completed for the silo areas we plan to build in Africa. For the end of the year, we were actually targeting a growth of 20 percent on a tonnage basis and 30 percent on a turnover basis. However, as the prices and exchange rates are so high, we can close the year with a growth of over 100 percent.”

FLOUR INDUSTRIALS SHOULD FIND NEW MARKETS

Mardin has a special place in the Southeastern Anatolia Region, which has a large share in Turkey's flour export. Mardin is the province with the largest share in Turkey's flour export. Flour exports of Mardin are mainly to Iraq and Syria, which are the closest markets. Iraq, which imports 2.5-3 million tons of flour annually, has a very important share in Turkey's flour export. However, developments in the Iraqi market in recent years worry some Turkish flour industrialists. Iraq has been establishing mills to produce its own flour in recent years. Drawing attention to this development, Hacıhaliloğlu warns, “The number of flour factories in Iraq is increasing rapidly. Iraq has now started to export wheat instead of flour. If the newly established plants come into operation and the flour industrialists with investments in Mardin and the surrounding provinces cannot find alternative markets, these investments will be rubbish. They should definitely create new markets for themselves with alternative markets and different products.”