TURKISH WHEAT HARVEST YIELD IS EXPECTED TO RISE
Wheat harvesting began in strategic regions considered to be the cereal production center of Türkiye. It is curious how climatic influences will affect the harvest, and how would the harvest yield turn out… Will the harvest started in Çukurova, Southeast, Antalya and Söke put a smile to the farmer’s face after the high purchase price given by TMO? Hasan Hacıhaliloğlu, CEO of Taban Gıda, who paid a visit to the wheat harvest in Mardin, said, “The harvest expectation in our country is not as low as last year’s figures. Heavy rainfall poured this year, and with climatic conditions, it suggests that we will have a more productive harvest. The economic crises and the agricultural policies implemented have distracted the farmer from production, and consequently the reduction of crop areas prevents wheat production rates from reaching the desired levels. Türkiye should use fertile farmland correctly by making long-term plans with new agricultural policies,” he said. TabanGıda, which dominates the sector as a playmaker at home by trading 1.6 million tons of wheat last year, has 20 percent market share domestically…
The rapid increase in currency exchange rates and the Russian-Ukrainian war marked the last period especially after the pandemic. New crises have completely changed the agenda and course of the cereals sector fighting climate change. The war of the two countries, which are wheat warehouses of the World, caused all countries to rethink their economic and political strategies. Taban Gıda reached a volume of over 2 million tonnes in 2021, which was difficult for all sectors, and closed the year with a turnover of over 4.5 billion TL. Taban Gıda, which has strong trade relations with Russia and Ukraine; conducts transit trade to about 20 countries on 5 continents, and is the leader of the wheat supply market in Türkiye, will open 2021 with investments closed with a growth of over 50 percent compared to the previous year. The company, who established its own fleet by taking 3 dry cargo ships with a total investment of $25 million within parent company Vivalon; is carrying out new investment moves by analyzing various risks and opportunities in global crises such as global climate change, pandemic and freight-costs crisis. With its silo investment in Samsun and its flour factory in Russia, Taban Gıda aims to spread its success to the globe.
We will become a global player
Hacıhaliloğlu stated that about 200 million tons of wheat are traded in the world, “As Taban Gıda, we make more than 1 percent of this figure. This year seems to be a much better year from our point of view. Our transit trading volume is increasing exponentially every year. Looking at our consolidated balance, we expect our transit trade volume, which was 350 thousand tons last year, to be over 1 million tons this year. We aim for our transit trade turnover of $150 million in 2021 to rise to over $500 million by the end of this year. Besides, we plan to gain a place in the feed raw materials market, especially in the domestic market. We have come to a fairly strong position in the West African market. This year we aim to grow in the European market and gain a stronger place in the Asian market. Therefore, we will become a global player.”
We expect an increase in wheat yield this year.
Hasan Hacıhaliloğlu stated that they expect a higher amount of wheat yields this year than in previous years, “There is a difference of 10 to 15 percent between TUİK and our estimates. TÜİK expects 19.5 million tons of wheat yield for this period. However, we estimate that it will be about 17 million tons. That’s the expectation in the USDA reports. TÜİK’s expectation of yield for corn sounds more accurate. We are above the world average in corn yield. The production cost of corn is higher than wheat, but the yield return is also higher. Therefore, wheat planting in Türkiye is shifting to corn.”
Hasan Hacıhaliloğlu: “I approve the move of TMO”
“We did not expect wheat purchase price to be below 6,500 TL,” Hacıhaliloğlu said, “This year, TMO announced a purchase price of 7,050 TL with the premium, which has been a lifeline for the industry. Considering that the 1,000 TL support will be given in the fall, the method can be criticized, but we have seen the highest purchase price given on the basis of USD. We approached $420, which is the world average in wheat. This figure could also increase the proportion of areas that can be planted next year,” he added. Underlining that the availability of wheat in Türkiye is not a problem, Hacihaliloğlu said, “Our country imports about 10 million tons of wheat every year. About 2.5 million tons of this figure is for our own consumption. There is no such problem as not being able to be find or supply wheat or corn in Türkiye. The necessary amount can be easily obtained from Russia, but the cost would remain high,” he remarked.
It is necessary leave no agricultural land in Türkiye uncultivated.
We try to protect ourselves from price fluctuations by taking positions especially during harvest periods where the supply is highest, Hacihaliloğlu said, “Firstly, of course, the country’s production needs to meet the consumption. Regarding Türkiye, it seems very difficult to achieve the supply and demand balance. If Türkiye does studies to increase wheat planting areas and productivity, we will become very advantageous in the coming years at the point of meeting our own needs. I think we can reach the position of the exporter again in the coming period with the steps of digitalization in agriculture and the effective use of these instruments. It is necessary leave no agricultural land in Türkiye uncultivated. Türkiye’s soil will see the best in productivity after switching to intelligent agricultural practices. Farmers turn their face to corn because it has higher yield returns. There is a significant reduction in wheat cultivation areas in Türkiye. There is an escape to cotton on the side of Şanlıurfa and oilseeds on the Black Sea side,” he said.
A much worse scenario awaits the world if Ukraine cannot carry out the harvest
In Ukraine, about 60-70 million tons of cereals and oilseeds are produced annually. It exports more or less than 20 million tons of wheat and 10 million tons of corn annually. Hasan Hacihaliloğlu, CEO of Taban Gıda, said, ‘There is already a 30 per cent loss in wheat planting areas. Regarding corn, May was the time of planting. The planting rate remained at 50 percent compared to the same period last year. The lack of operation of ports in Ukraine is also one of the biggest problems. If we would set aside the combat environment so that the harvest can be made, it is still quite difficult for Ukraine to find fuel oil at an affordable price and get this product to world markets. A much worse scenario awaits the world if Ukraine cannot carry out the harvest.” he remarked.
Russia does not have any problems with sales
With the harvest period approaching in Russia, it is estimated that the last period will bring the largest yield. Hasan Hacıhaliloğlu, “Russia does not have any problems with sales. If it is assumed that Russia will export 40 million tons of wheat this year, it sells 10 million tons only to Türkiye. Lastly, they made a 5 million tonnes deal with Iran. Egypt imports just as much as we do. Naturally, it reached the export figure of 25 million tons with only three countries when you look at it. When we put China and other countries around it into this equation, there is no problem on the issue of Russia not being able sell their products. Russia has a strong hand in this regard and uses it as a trump. If necessary, they would dump 10 million tons of wheat into the sea and would try to bring the world to their knees. Russia ranks in the top third in the world not only in grain, but in many of the products, and this strengthens Russia’s hand,” he said.
“The cereal corridor is an optimistic discourse”
“I think discourses like the grain corridor will open are optimistic discourses. If the work on Ukraine is to be carried out under Russian control, the world will not allow this trade. if the trade would not be under Russian control, I am of the opinion that Russia will not allow it,” Hacihaliloglu said, “On the other hand, it is observed that the ports are not available today. These ports need to be repaired. There are no such problems with loadings from Russia. But there are different problems in the region. For example, insurances of vessels carrying loads in the region cannot be made because they are considered risky,” he added.
Long-term agricultural policies can put Türkiye in a strong position in the world.
The Russian-Ukrainian war showed that it is very important for countries to produce at a sufficient level, especially in food. Türkiye has fertile soils in terms of wheat quality. Moreover, Hacıhaliloğlu stated that we are in a strong position in terms of soil processing and seed quality, and said that “I think the ongoing crisis between Russia and Ukraine will bring Türkiye to an important point in the future. Due to its location, our country will have critical importance in the transit trade network. If Türkiye makes long-term plans on agricultural policies, and plans agriculture incentive policies in favor of the farmers, using fertile farmland correctly, in the future it can take a strong position in the world food market. As of today, according to European prices, Russian wheat is below about 40 dollars. Türkiye is the largest flour exporter in the world today and is second in pasta after Italy. I think Türkiye will be profitting from this trade when we write other articles in the lower bottom.” he said.
Smart agriculture, digitalization and increased yields…
Hasan Hacıhaliloğlu said, “With the growing world population, the need is also increasing. We need to take all the opportunities we have in order to meet these needs. And we can go on a path to solving this by digitizing agriculture. We need to take more planned and strong steps in this area. The most profitable crop will be planted in the right region. If the right crop is planted as needed for the right land, the supply and demand balance and therefore the right price will be formed. With digitalization, agricultural land will be used more effectively and production will be made for the needs. Thanks to this, the productivity of agricultural commodity will increase. Thanks to sustainable agriculture, we will leave healthier soils for future generations. This must be one of our greatest responsibilities towards the future,” he said. Hacihaliloglu, referring to the agricultural policies of Türkiye, “There are many large and very valuable lands in our country. We must encourage the farmer to plant their own soil, and must move on to contract agricultural practices. The region of our country will become much more efficient with intelligent agricultural practices. If the right crop is planted as needed in the right land, the supply and demand balance and therefore the right price will be formed. For example, South Eastern Anatolia produces the best pasta in the world, but it is not allowed to export it. After producing enough portion for ourselves, we export the remaining part with the right methods in some way and buy bread wheat in return, therefore our country will increase the earnings by 50 percent.” he remarked.
We could end this year with growth of over 100 percent
“We anticipate that we will grow very gravely in terms of transit trade,” Hacihaliloğlu said, “In fact, harvest times starting in June-July will be more decisive for us. Especially from July to November, there are times when we are the most bustling. We will also get the fruits of 2022 in this period. The fact that our own ships are now operating at full rate increases our trading volume. We can say that feasibility studies have been completed for our planned landfills in the African region. For the end of the year, we were actually aiming for growth of 20 percent tonnage-based and 30 percent turnover based on turnover. However, as a result of prices and currency rates being so high, we can end the year with a growth of over 100 per cent.”