May 7, 2004

Turkey's 2004 Corn Imports To Reach 700,000 MT

Due to higher than expected feed demand, Turkey's corn imports in 2004 are expected to reach 700,000 metric tons, according to a U.S. Department of Agriculture attache report issued Wednesday and posted on the Foreign Agricultural Service Web site.

High feed demand will also result in higher barley imports. Rice, imports, which are currently constrained by a new quota system, are reduced to 200,000 MT. Some wheat and barley areas received inadequate rainfall in March. Production and quality are likely to be affected as a result.

In MY 2003, Turkey imported a record amount of U.S. corn. At the end of the 2003 import season Turkey harvested a large corn crop. These large supplies have also been met with large demand. Currently imports are constrained by a seasonal 80 percent tariff that is expected to be lifted in May. End-users are beginning to feel the price pressure as domestic supplies are utilized. Bilateral agreements with the EU, Romania and Hungary amount to 152,000 MT corn that can be imported duty-free (52,000; 45,000; and 55,000 respectively), the report said.

Once these supplies and TMO stocks clear the market (within one month's time), the import duty will be lowered. Once the duty is lowered, imports of corn in Turkey are expected to reach 700,000 MT in MY 2004.

To combat high prices for feed barley, TMO has elected to import barley. For reference, local barley prices are about TL 430,000/kg, or about USD 325/ton. To date, 175,000 MT has been imported. Recently, TMO announced an additional tender for 75,000 MT but bought only 40,000 MT. Beer brewers also bought some malting barley in addition to this amount.

Accordingly, MY2003 imports are revised upwards to 300,000 MT.

The rice market has experienced a slightly different fate. In MY 2002 Turkey commercially imported 405,000 MT. According to industry and government sources, this large level of imports and resulting large stocks, has resulted in lowered domestic-crop purchases from traders and millers. Accordingly, TMO stepped in to purchase relatively large domestic supplies. For reference, TMO purchases less than five percent of the wheat crop annually. In 2003, TMO purchased over thirty percent of the domestic rice crop at relatively high prices, the report said.

As a result, TMO has extended the annual ban on rice imports late into the spring. In a recently announced policy, TMO will allow importers to import rice only after they purchase rice from TMO stocks. This quota will be allocated on a 1-to-1 basis. Based on estimations of TMO stocks, imports of only about 120,000 MT rough rice basis will be permitted. Traders have significantly more than this (milled and rough) in bonded warehouses waiting customs clearance. It is likely that traders will first clear their milled rice. As a result of this policy, MY 2003 imports are not expected to exceed 200,000 MT. Further, high domestic prices will also lead to a reduction in domestic consumption.

Source: USDA