Turkey expected to introduce new reduced tariff import quota for corn mid-March/early-April

The Turkish government is expected to introduce a fresh import quota for corn at reduced tariff rates around mid-March or early April, creating a rush to secure cargoes ahead of its introduction, according to sources in the Black Sea market.

In a move aimed at stabilizing domestic prices, the government last October reduced the import tariff from 130% to 5% for 1 million mt of corn, after which the tariffs reverted to 130%.

Turkish importers are rushing to secure cargoes to ensure they arrive by mid-March or early April to take advantage of the reduced tariff quota, traders said.

“If you import late, you may not get the [reduced] duty because the quota operates on a first-come, first-served principle,” a trader based in Kyiv noted.

Market sources in Turkey indicated that the high demand at this time of year is unusual.

“Currently, all the starch and chicken factories are full until April. I think only traders are buying now to meet the quota,” an importer based in Ankara said.

However, market sources said that a new quota for corn imports was only likely to be brought in if local corn prices exceed Lira 10,500/mt ($288/mt), Currently they are around Lira 9,700-9,800/mt although prices are expected to rise in April after the end of Ramadan.

“The quota will depend on the local prices that are currently rising…. I’m sure the state will announce quotas. I’d expect it to be in early to mid-April as well,” a Tukey-based grain broker said. “But if the local corn price skyrockets earlier, it can happen earlier than expected.”

Meanwhile, warehouses in Turkey are currently almost full with imported corn awaiting the official import quota to be introduced, according to sources.

“They [importers] will not sell. They will wait for the quota from their warehouses. But there is already too much corn in the warehouses, and more is coming. After the quota, they will try to sell simultaneously, and those who secure better prices before the quota will win this trade battle,” a Turkish buyer said.

The buyer added that the CIF prices will likely drop after the quota is established in Turkey.

Amid rising demand and the expectation of a quota, Turkey’s corn imports from Ukraine have risen this month, according to traders.

Approximately 241,000 mt of corn were shipped to Turkey from Ukrainian ports over Feb. 1-18, making Turkey the primary destination for Ukrainian corn, according to data from traders in Ukraine.

“Turkey’s corn supply and demand only requires about 500-600,000 mt extra imports to reach the new season. The real importing season will be the next one,” a market participant in Geneva said.

Platts assessed Ukraine corn FOB POC at $234/mt on Feb. 24 for loading from March 24 to April 7.

Tags: Ukraine, corn, Turkey