March 27, 2010

 

Turkish poultry sector raises concerns on exports to Russia

Russia's request for 500,000 tonnes of white meat from Turkey has caused disagreements among many in the sector as traders are concerned that the supply-demand balance would be affected.

 

As Brazil and the US, two main suppliers of poultry to Russia, face the possibility of losing the market due to excessive chlorine usage in their products, Russia has begun turning to Turkey to satisfy its needs.

 

After coming to Turkey to prepare feasibility reports following inspections of poultry production facilities, committees from Russia have signed six contracts with Turkish producers over the last few months, with 11 more deals likely in the near future.

 

Negotiations for the imports began with a recent official visit by Turkish Prime Minister Recep Tayyip Erdoğan and State Minister Zafer Çağlayan to Russia, along with the end of a Russian ban on poultry imports from Turkey on February 1.

 

The new export prospects, however, have elicited varying reactions from Turkish authorities on the matter.

 

Russia's demand for an annual 500,000 tonnes is far beyond the current potential of poultry producers in Turkey, Ramazan Altıntaş, who is responsible for exports at poultry producer Şeker Piliç, told reporters.

 

"It does not seem possible to exceed 120,000 tonnes at the facilities in hand today," he said.

 

Expecting a rise in white meat prices following the beginning of exports to Russia, Altıntaş also said prices already increased in summer months; now, however, the prices could double because the exports would begin during these peak months.

 

Mehmet Sönmez, a local producer in the southern province of Antalya, said the diplomatic agreements with Russia have been made without an initial feasibility plan on the Turkish side to determine the strengths and weaknesses of the sector.

 

"Let alone 500,000 tonnes, even 200,000 tonnes of poultry export will shake the domestic supply-demand balance in Turkey," he said. "There will be a substantial increase in the prices resulting from the decrease in the domestic supply with the start of the exportation."

 

When contacted, managers at Keskinoğlu Tavukçuluk, one of the Turkish producers with whom Russia has signed a contract, were hesitant to address the concerns surrounding supply.

 

This year's projected export volume to Russia will be limited to 60,000 tonnes, but the volume will be increased to 120,000 tonnes in coming years, according to a statement from government authorities that has temporarily relaxed concerns.

 

Further to price concerns, Turkish Agriculture Minister Mehdi Eker said in a recent speech that poultry exports to Russia would not affect domestic prices under any circumstances.

 

There was a clear difference between production for export and the supply for the domestic market, Eker said, adding that modern facilities in Turkey have enough potential to meet the rising demand without disrupting the supply-demand balance.

 

Meanwhile, corn growers are pleased that the negotiations with Russia have already led to a substantial rise in corn prices even before the beginning of any exports.