The Turkish government has decided to lift import duties on grain imports but its impact on Black Sea grain prices is expected to be limited owing to the contained scope of the decision.
Imports of wheat, barley, rye, oat, corn, lentil and chickpeas will be subject to a 0pc import duty until 31 December, compared with a range of 17.3-130pc that applied previously, under a presidential decree.
The decree followed higher grain imports from Turkey in the 2021-22 marketing year following poor domestic production and despite rising wheat and barley prices in the global markets, including Russia and Ukraine — the largest grain suppliers to Turkey.
But most Turkish buyers already hold an importing licence and will not be directly impacted by the decree, market participants said. The licence represents a cost of around $5/t — a negligible sum for millers in particular.
And Turkey's state-run grains agency TMO — thne largest grain importer in the country — mostly covered its September-October wheat and barley requirements through a series of tenders since last month. In return, small-scale private buyers not holding an import licence could enter the market to benefit from the new regulation.
The decree is also unrelated to an ongoing congestion of grain vessels carrying Russian and Ukrainian crop in the Black Sea. Vessels were said to be awaiting Turkey's removal of import levies but have actually been held back in the open sea as construction work around the Strait of Gallipoli has weighed on maritime traffic.
That said, levy removal could send a signal to the market that Turkey still needs to import grains — milling wheat in particular for its large-scale flour production and because of the weak domestic crop — agribusiness firm Agrozan Commodities' Country Manager for Russia, Sabina Sodikova, told Argus. At the same time, local grain stockholders and speculators in Turkey could rush to step up sales in the domestic market amid rising availability of imported supply, Sodikova said.
Russia could meet most of Turkey's milling wheat requirements, with its crop reported to have a higher protein quality than the Ukrainian equivalent. Turkey has already been the largest importer of Russian grains so far in 2021-22, having received a combined 2.71mn t since July, including 2.03mn t of wheat.
