Turkey seeks to reduce large wheat stocks

Turkey is having difficulties exporting wheat.

Despite a projected 2 mln tonnes year-on-year decline in production, Turkey still has large wheat stocks that it is trying to eliminate, according to a report by the Foreign Agricultural Service (FAS) of the US Department of Agriculture.

With ending wheat stocks at the end of the 2023-24 marketing year reaching a record 5.3 million tons, the Turkish government announced in June that it was suspending wheat imports until October 15 to try to reduce the oversupply. However, the FAS noted that due to the large price difference between Turkish and imported wheat ($320 per ton versus $240 per ton), flour and pasta exporters were unwilling to use local wheat during the suspension and preferred to wait for imports to resume.

After the supply suspension two weeks ago, the Turkish Grain Board (TMO) informed grain processors that they could import 15% of their wheat in exchange for purchasing 85% of the wheat from the TMO.

“According to market sources, this practice is likely to continue until the end of 2024,” FAS said in a statement.

“TMO is reportedly selling its stocks below domestic wheat prices and in line with international prices, ranging from $235 to $245 per ton. Selling at a discount seems to be a retreat from the government’s commitment earlier this year to stop selling grain below cost in order to save public resources. However, the government now seems to have realized that it will have to sell its wheat stocks at a discount if it hopes to ever get rid of its huge inventory.”

According to the FAS, Turkey is experiencing difficulties with wheat exports “due to import restrictions and slowing demand for Turkish flour from Iraq.” According to the agency’s forecasts, this year’s exports will decline to 7 million tons, which is 30% less than in 2023-24.

Despite these factors, the FAS forecasts the ending stocks in 2024-25 to decrease by 43% compared to the previous year – to 3 mln tons.

Turkey’s wheat production is forecast to decrease by 11% compared to last year’s record figure and amount to 18.7 mln tons “due to dry weather this spring”, the FAS said in a statement.

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Tags: stocks, Turkey, wheat