Lifting of restrictions on wheat imports to Turkey supported prices in Ukraine, although the main supplies will be from Russia

The Turkish government on March 19 allowed duty-free imports of wheat into the country to fully meet the needs of the flour milling industry, the Turkish Grain Council reported.

Previously, flour mills purchased 75% of the required amount of wheat from the TMO, and imported the remaining 25%. From March 19, they will be able to import the required amount of wheat, provided that they subsequently export the corresponding amount of flour.

Thus, Turkey is trying to regain the status of a major global flour exporter that it has lost recently. Thus, in the MY 2024/25, the country reduced flour exports by 41% compared to the previous season, from 2.45 to 1.44 million tons.

The lifting of restrictions on wheat imports, coupled with a reduction in corn duties, led to an increase in food wheat prices in Ukrainian Black Sea ports by $5-6/t to $235-238/t.

The decision of the Turkish government will contribute to the activation of exports of high-protein wheat primarily from the Russian Federation, and not from Ukraine, however, the volume of supplies will be limited, since initially the volumes of Russian wheat already imported to Turkish warehouses will be used (before the introduction of restrictions on supplies from the Russian Federation from February 15), and already in June Turkey will begin to harvest its own harvest.

Experts from Russia forecast that in March-June Turkey will import 1.5 million tons of wheat, mainly Russian, and in total in the MY 2024/25, imports will amount to 4 million tons of wheat (taking into account re-exports to the Middle East countries), in particular from Russia – 3.8 million tons, while in the 2023/24, imports amounted to 8.2 million tons, of which from Russia – 7 million tons.

May wheat futures fell yesterday, failing to react to news from Turkey:

• by 1% to $204.75/t – for soft winter SRW wheat in Chicago,
• by 0.2% to €226.75/t or $245.5/t – for wheat on the Euronext exchange in Paris.

The updated wheat balance for the MY 2024/25 from the International Grains Council is putting pressure on the quotations, in which the estimate of world production is increased by 2 million tons to 799 million tons, and stocks by 1 million tons to 265 million tons.

Iran’s State Trading Company (GTC) last week purchased at least 250,000 tons of Russian wheat with 12.5% protein at a price of €310/ton or $338.6/ton C&F, which will also support prices for Russian wheat, although the main supplies to Iran are made by state-owned companies.

Tags: Russia, Turkey, prices, wheat, Ukraine