Turkey may extend ban on wheat imports amid good harvest and large stocks

According to the forecasts of TurkStat Institute, in 2024/25 MY Turkey may harvest 21 mln tonnes of wheat, which is 4.5% lower than the previous season. Currently, the quality of wheat is very good in most regions.

According to the IGC, the country’s wheat stocks amount to 8.1 mln tonnes, which is 1.5 mln tonnes lower than last year’s level, but significantly higher than the average.

Against the background of high production and stocks, the state agency TMO buys wheat at low prices, which is not good for farmers who face 75% inflation. To remedy the situation, the Turkish authorities imposed a ban on wheat imports on June 6. Domestic market participants believe that the ban will be extended until the end of 2024, but it will depend on the stocks and quality of wheat.

The market reacted to the import ban by lowering prices, including freight rates in the Azov and the Sea of Marmara, where active wheat shipments from Russia took place. Thus, freight rates for short sea transportation of wheat from Russia to Turkey decreased from 28-30 USD/t to 13 USD/t.

After Turkey imposed the ban, Russia will have to look for new markets for its wheat. It is likely to step up supplies to Egypt, Syria and other North African countries, which will increase competition with Ukraine, which also exports wheat to these markets.

Currently, the market is waiting for the meeting of the Presidents of Turkey and Russia to be held in Astana on July 3-4, as Russia will ask for an exception to the ban on wheat imports to continue deliveries to Turkey.

According to the broker Kronmark Turkey, the TMO does not plan to hold an international tender for the purchase of wheat amid significant stocks in the country. Therefore, further purchases will be determined by the demand for wheat.

Tags: wheat, restrictions, crop forecast, Turkey