Turkish Barley: Zero Import Duties
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Barley is cultivated in almost every region of Turkey, but especially Central Anatolia (Konya, Ankara, Eskişehir, and Kırşehir) and Southeastern Anatolia Region (Şanlıurfa, Diyarbakır, and Mardin) are two important regions for Barley cultivation. Barley production for MY 2022/23 is forecast at 7.0 MMT, assuming improved weather conditions and an expansion in the area harvested. The area harvested is projected to increase by 100,000 HA to 3.8 million HA as farmers plant more in response to improved returns than other row crops, such as wheat.
Barley production estimate in MY 2021/22 estimate was at 4.5 MMT. Barley fields are generally unirrigated, and yields are directly linked to rainfall. Farmers are facing skyrocketing input costs, including fertilizer and fuel. Costs increased because of a weaker Turkish Lira (TL), rising international commodity prices, supply chain issues, and, more recently, the war in Ukraine. For instance, diesel prices have more than tripled since October last year, rising from 7 TL/liter ($0.82 /LT) to 22 TL/liter ($1.5 /LT).
In response to higher input costs, the Government raised the support payments to Barley farmers for fertilizer and diesel from 350 TL/HA ($50 /HA) to 420 TL/HA ($29/HA). In addition, the government provided a one-time, extra payment of 500 TL/HA ($34.5/HA) to specifically offset higher fertilizer costs. However, farmers don’t think these payments are enough to cover these higher costs. There is concern that some Barley farmers may reduce fertilizer use to save on cost, which could impact yields and overall production amounts.
Barley consumption in MY 2022/23 is projected at 7.7 MMT, up 200,000 MT from the previous year’s new estimate due to higher domestic production and steady domestic demand from the feed and malting industries. About 40 percent of consumption is estimated to be imported Barley, compared to less than 10 percent the year before. Consumption of imported Barley has shot up since there was a shortfall in domestic production due to the drought.
TMO purchased most of the imported Barley and sold it at a discount to end users in the feed sector. The discounted Barley was sold at 2,050 TL/MT ($151/MT), far below the spot market and commodity exchange prices. In March of this year, the price of Barley on the Polatli Commodity Exchange was 4520 TL/MT (~$312/MT), up more than 35 percent from the same time a year ago. Feed manufacturers and, to a lesser extent, the malting and beer industries are the leading end users of Barley. Feed use accounts for about 90 percent of total Barley consumption and is predominantly used in ruminant feed. Depending on the price and availability of Barley, feed makers may decide to switch to alternative ingredients such as wheat bran. Malting Barley consumption is estimated at around 900,000 MT.
Turkish Barley Trade
For MY 2022/23, Barley imports are projected at 1.0 MMT, down by more than 2.0 MMT from the previous year since the domestic Barley crop is forecasted to increase. The forecast assumes Turkey can keep sourcing imported Barley at a competitive price from Black Sea suppliers; Turkey historically only imported Barley from Black Sea countries. To stabilize prices, the Government zeroed out import duties on Barley and other grains (except rice) in calendar year 2022. Leading suppliers were Ukraine, Russia, and Romania. TMO purchased most of the imported Barley through a series of international tenders.
According to AgFlow data, Ukraine led the Turkish Barley import market with 1.7 million tons in 2021 – 2022, followed by Russia (0.7 million tons) and Romania (0.3 million tons). In MY 2022/23, Barley exports are forecast at 100,000 MT, assuming continued demand from neighboring countries. Major export destinations were Syria and Cyprus.
Other sources: https://www.usda.gov
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