Turkey to Refine and Re-Export 600,000 Tons of Sunflower Oil
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Turkey’s MY 2023/24 total vegetable Oil production forecast is down about eight percent to about 1.7 MMT, primarily due to a forecasted drop in Oilseed production. This decrease in Oil production will mostly be offset by large MY 2022/23 carryover stocks of Sunflower Oil as importers build their inventories while the import duty is still zero. Sunflower Oil is a significant household staple. Turkey continues to import large quantities of Sunflower Seed Oil for domestic consumption and for refining and re-exporting to neighboring countries.
Imports of crude Sunflower Oil from Ukraine have surged in recent months. A large percentage of this incoming Ukrainian Oil is processed and re-exported. Turkey exports vegetable Oil from imported Sunflower Seed and soybeans, and olive Oil. Turkey has a large Oilseed crushing and refining capacity and continues to invest in new and modern facilities. In CY 2023, the total crushing capacity was about 9.0 MMT, and the refining capacity was 4.0 MMT.
The production of Sunflower Seed Oil in MY 2023/24 is projected at 1.1 MMT, down year-over-year by 100,000 MT. This decrease is mainly attributed to the expected reduction in local Sunflower Seed production. MY 2023/24 Sunflower Oil consumption is forecast to be higher than the previous year at 1.3 MMT, assuming steady consumer demand. Sunflower Seed Oil is the most widely consumed cooking Oil in Turkey because of its affordability. The use of alternative vegetable Oils made from genetically engineered crops is prohibited under the country’s onerous biotech restrictions.
MY 2023/24 Sunflower Seed Oil imports are forecast at 1.5 MMT, down year-over-year by 100,000 MT, as the pace of import, especially from Ukraine, is expected to cool down. The MY 2022/23 Sunflower Seed Oil import estimate is revised sharply higher to 1.6 MMT, primarily based on a surge in cheap crude Oil imports from Ukraine. Of this estimated import volume, 400,000 MT is expected to go for domestic consumption, 600,000 MT for refining and re-export, and 500,000 MT for transshipment.
From September to December in MY 2022/23, Sunflower Seed Oil imports reached nearly
486,000 MT, up more than 40 percent compared to last year. Ukraine was the leading supplier, followed by Russia. In recent years, Russia has increasingly preferred to ship value-added Oil instead of Sunflower Seeds to Turkey. According to AgFlow data, Turkey imported 0.15 million tons of Sunseed Oil from Russia May-June 2023, followed by Ukraine (0.13 million tons).
The Turkish Government has taken measures to curb record food inflation due to domestic pressures and international market uncertainties. As part of its cost-cutting efforts, the Government has temporarily cut import tariffs on Sunflower Oil, Sunflower Seeds, and other commodities on several occasions in the last few years. The current duty on imported Sunflower Oil was zero from January through June.
In addition, to keep domestic Sunflower Oil prices stable, the Turkish Grain Board (TMO), a government-affiliated body, issued international tenders to purchase about 100,000 MT of crude Sunflower Oil from December last year through February. The TMO-purchased Oil is typically sold to consumers at a discount. TMO retail price is 135 TL ($7.10) for 5 liters.
Sunflower Oil Exports in Turkey
MY 2023/24 Sunflower Seed Oil exports are projected to be lower than the previous year at 1.35 MMT, assuming lower re-export and transshipment volumes. To ensure adequate local supplies at affordable prices, the Government has prohibited Sunflower Seed Oil exports derived from domestic Sunflower Seeds since March 2022. The MY 2022/23 Sunflower Seed Oil export estimate is revised sharply higher to 1.45 MMT, based on the surge in re-exports and transshipments of Ukrainian Oil. In the first four months of MY 2022/23 (Sep-Dec), exports reached about 410,000 MT, up about 90 percent compared to last year. The main export destinations were Iraq, Djibouti, and India.
Other sources: USDA
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