The Turkish government has banned all wheat imports until mid-October. Türkiye's strategic decision to halt wheat imports has introduced a significant variable into the global grain market. As the country grapples with domestic production challenges and seeks to protect its farmers, the ripple effects of this policy are being felt worldwide.

Ban could be extended

Late last week, strong rumors were circulating in international grain markets that Türkiye might extend its wheat import ban beyond the announced end date of October 15. Speculations suggested that imports might not resume until December or even the new year.

On June 6, the Turkish Ministry of Agriculture and Fisheries announced the suspension of wheat imports under the active processing traffic from June 21 to mid-October to protect the country's farmers from price declines and other negative impacts during this year's harvest. The ministry also noted at that time that the ban could be extended beyond October if circumstances warrant.

Key Points:

• Wheat Imports Suspension: Türkiye has halted wheat imports to protect local farmers during the harvest.
• Potential Extension: There are strong speculations that the ban might be extended beyond mid-October.
• Export Allowance: Türkiye plans to lift the ban on the export of domestically produced wheat flour, in place since September 2018.

The Turkish government also announced that the export of flour made from domestically produced wheat, which has been banned since September 2018, will be allowed again. Additionally, the government has liberalized the export of barley, milling wheat, and durum wheat due to surplus stocks from the 2023/24 economic year and introduced an export licensing system controlled by the Turkish Grain Board (TMO).

Impact on Global Wheat Markets:

• Russia's Major Supplier Role: Russia, the largest wheat supplier to Türkiye, is significantly impacted by the ban.
• Import Statistics: In the first eight months of the Turkish economic year 2023/24, Türkiye imported 6.45 million tons of wheat, with 83% from Russia and 14% from Ukraine.

Türkiye, the world's leading exporter of wheat flour, does not import wheat primarily due to its high per capita bread consumption. Since May 2023, wheat imports have faced a hefty 130% tariff. However, this tariff is waived if the imported wheat is processed into flour or pasta and then re-exported. The USDA Foreign Agricultural Service projects Türkiye's total wheat production for the 2024/25 season to be 18.75 million tons, which is 1 million tons less than the initial forecast and 10.7% lower than last year's record harvest of 21 million tons.

A prolonged import ban could lead to increased competition on traditional markets for Western European wheat, pressuring export prices of European countries. The USDA expects Turkish wheat imports to fall if the ban extends beyond October, negatively impacting Turkish flour exporters' competitiveness and market share.

Conclusion:

An extended import ban would mean that Russia would need to act more aggressively in pricing, affecting markets such as Morocco, a significant buyer of European wheat. This could intensify competition and lower export prices in Europe. If Türkiye extends the wheat import ban, Russia will need to seek new export opportunities despite expected production declines.