Trade braces as fears Turkish sunseed import duties could rise to 27%, sunoil to 36%

Trade sources spoken to by Agricensus have said they expect the Turkish government will increase import duties on both sunflower seeds and sunflower oil to 27% and 36% respectively from June 1, after the current zeroed rate expires on May 31.

“This is the market expectation but it’s not officially announced yet,” a Turkey-based source told Agricensus.

Despite the fact that there has been no official notification of what the import duties will be as of June 1, 2023, Turkish sources expect that any increase in duties will slow down the pace of imports, which was expected and provided by the market.

“The market has been expecting this and the increase in duties, whatever they are, is not a surprise to us, even if a preferential rate is applied,” a Turkey-based broker told Agricensus.

“The duties, which are scheduled to be introduced on June 1, should have already been taken into account by the market. With the tariffs coming into effect soon and a new harvest season starting in Turkey, it is reasonable to expect a noticable slowdown in import demand from Turkey,” Yılmaz Cakabey Aytug from Naragro said.

However, that will have a significant impact on the Ukrainian sunflower oil market, as Turkey is one of the key buyers of Ukrainian flows, as well as an important link in redirecting Ukrainian sunflower oils in the Black Sea grain corridor.

“Imports will stop. Only re-exporters and transit sellers will continue buying, with 50% pace of the first five months,” Onat Angi, Chairman of Solventum AS told Agricensus.

In addition, expectations of a good sunflower harvest in Turkey this season will not influence the formation of consumer interest.

“It means Turkey would only buy if the price is competitive. On the other hand Ukraine can’t afford to lose its key buyer and thus will have to adjust the pricing lower,” Anilkumar Bagani, head of research at Mumbai-based vegetable oil broker Sunvin Group told Agricensus.

At the same time, the presence of Russian sunflower oil on the market and the willingness of Russian sellers to significantly lower prices will put pressure on prices for Ukrainian sunflower oil.

According to USDA expectations, Turkey’s sunflower crop this season could reach 1.9 million tons, up 8.6% from last year and one of the largest crops in at least 10 seasons.

Ukrainian deliveries to Turkey from September to April of the 2022/23 season increased to 757,943 mt against 56,845 mt for the same period in the 2021/22 season.

Early January 2023 the Turkish government zeroed import duties on sunflower seeds and sunflower oil despite a record 2022/23 sunflower crop, while also prolonging the zero import taxes for grains in an effort to bring down inflation, local sources said Tuesday.

Tags: sunflower oil, sunflower, Turkey, restrictions