“Regarding the strategic products, let's bring all the necessary steps into action in a planned manner, in order to produce enough products at least for ourselves. Let's put aside searching for solutions after the fat is in the fire and seek proactive agricultural policies that will solve the problems before they occur. Wheat policies need to be managed correctly not to lose the power we have gained in flour and pasta exports and to develop and support exports.”
Wheat, for which the whole world has kept its eyes peeled particularly after the pandemic, is almost rattling the economies. The product, of which price increases rapidly due to drought and governments' panic buying, is one of the factors that enhances the global food inflation. The future of wheat, which is the raw material of bread, pasta, biscuits, and other bakery products, is one of the most curious subjects. We discussed the state of wheat with Hasan Hacıhaliloğlu, the CEO of Taban Gıda, the leader of the Turkish wheat supply market with a 20% market share.
We listened to the future targets of Taban Gıda, the shining star of the industry which was established in 2016 and managed to rank in the top 200 companies of Turkey, and his recommendations for solving the current problems in the market.
The answers of Mr. Hacıhaliloğlu, CEO of Taban Gıda, which plans to become an important link in the chain with its investment plans in wheat production and supply, are as follows:
Mr. Hacıhaliloğlu, first of all, thank you very much for taking your time for this interview. Can you give us information about the activities of Taban Gıda, one of the leading wheat supply companies in Turkey?
We supply grain, particularly wheat, feed ingredients, and oilseeds, from many markets of the world. Since 2016, we have been growing in the right markets with the right product, right price policy, and service quality. We carry out demand- and need-oriented transit trade to many countries of the world with many product groups. We are the private sector leader in the imported wheat supply market with a market share of 20 percent in Turkey, and we are among the top 200 in the "500 Largest Companies of Turkey" rankings.
Could you express your thoughts on the increased raw material prices due to the pandemic and exchange rates? How do you tackle these prices?
As in the rest of the world, agricultural commodity prices in Turkey are at the highest levels of recent years. Besides, the depreciation of the Turkish lira causes the sector stakeholders in our country to be even more affected by this situation. TMO is taking various steps to prevent further increases in the prices of bread, pasta, and feed. The most important of the measures it has taken is the raw material sales, which it offers to the market at almost half the market prices. However, various commitments stipulated by the institution causes confusion in the market. For example, TMO's demand for a very low-priced sales commitment for the entire factory capacity instead of asking for the amount that can be produced with the tonnage it supports has caused many manufacturers to not be able to use this support. This situation caused a further increase in the sales prices of raw materials in the market. Such low-priced raw material sales intimidate farmers who intend to plant and this causes a decrease in planting amounts. Instead of selling low-priced raw materials, it would be much more beneficial in every respect to support the end products offered by the producers to the market under strict controls.
We try to make our sales in cash to the extent possible. In this way, we are minimally affected by the exchange rate. Because as the exchange rate increases, the domestic market prices also increase.
WHEAT PRICES WILL SOON EXCEED 400 DOLLARS
Wheat exporting countries have imposed bans, restrictions and additional taxes. Taking into consideration also the loss of yield caused by the drought, more wheat imports loom on the horizon. All these cause price hikes. How further do you think prices will increase?
At the Global Grain conference held in Geneva, Switzerland, we saw that international sector representatives shared these concerns. As a general view, it seems that the increase in agricultural commodity prices, especially wheat, will continue in the coming days. The quota to be imposed by Russia, the world's largest wheat exporter, by the start of the New Year, seems to support the price increases. We estimate that wheat prices will exceed 400 USD/metric ton within a short period.
TMO'S LOW PRICE WHEAT SALES REPULSE FARMERS FROM PRODUCTION
What are the precautions to be taken for the grain industry, which is experiencing a challenging process?
Exchange rate fluctuations and price increases in global commodities left the sector in a tight spot. Weekly, even daily, price increases make the lives of the private sector players very difficult. Although there are many companies that can handle these fluctuations in the sector, there will be others who cannot maintain their commercial activities for sure. In particular, suppressing bread prices makes life difficult for bakers. In addition, the low-price sales made by TMO in an attempt to keep prices of some raw material under a certain level make the farmers drawback from