Turkey's macroeconomic woes are expected to put pressure on grain imports, with its purchase pattern switching from long-term to spot, Kesmezlioglu Grain Trade managing partner Sinan Bayrakli said.
Turkish grain imports are expected to contract, despite a poor domestic harvest this year, amid steady losses of the lira against foreign currencies, along with rising inflation, Bayrakli told participants at the Paris Grain Day conference today.
There has been a "serious decrease" in Turkey's poultry and cattle production capacity amid financial challenges, which is weighing on the country's long-term animal feed grain imports, according to Bayrakli.
That said, re-exports of grains and exports of grain-based products could provide some support to Turkey's imports. The country has imported 7mn t of wheat and 2mn t of corn so far this year and is using its sizeable storage capacity for re-exports to Iraq, Iran and parts of Africa, as well as flour and pasta exports worldwide, Bayrakli said.
Rising macroeconomic concerns have also shifted Turkey's grain import patterns, with commercial risk appetite declining gradually. Both private buyers and state-owned grains agency TMO have shifted to spot purchases this year from long-term deliveries, Bayrakli said.
Turkey is expected to import 11mn t of wheat and 3.3mn t of corn in the 2021-22 marketing year (July-June), under US Department of Agriculture estimates, up by 8.08mn t and 1.78mn t, respectively, from a year earlier. This was as drought conditions in 2021 weighed on crop conditions, with the country's wheat output hitting a seven-year low of 16.25mn t. Rapid losses in the lira's value at the end of last year have hit grain imports by private firms in particular, which were heard to suspend purchases at the time. Meanwhile, the country's flour exports slowed significantly, as increased crush margins are unable to offset local price hikes in wheat.
