Sunflower meal market: whom will Turkey prefer?

21.08.2018

The global trade trends are now increasingly influenced by geopolitical factors. The dispute between the US and China had not been settled yet, but a new point of confrontation emerged, this time around Turkey. US President Donald Trump sanctioned raising tariffs on steel and aluminum imports from Turkey – this step was followed by a drop in the Turkish lira exchange rate. In retaliation, Turkey doubled its import duties on 22 US items: the Turkish media mention rice, tobacco products, alcohol beverages, cosmetics, coal and passenger cars among them.

Let us leave it to financial analysts to assess the gravity of the economic situation, ways of overcoming the crisis, probable consequences for the conflict parties and the global economy as a whole. We’ll focus on Turkey as a significant player in the Black Sea oilseed market and on prospects for the new 2018/19 season under the present conditions.

Turkish sunseed production has set a record in the current 2017/18 season. The crop hit a high of 1.55 MMT. That is why it was expected before that sunseed imports to Turkey would fall to 450 KMT, but, contrary to expectations, they follow an upward trend this season, UkrAgroConsult’s analysts report.

In these circumstances, to protect local growers, the government of Turkey traditionally decided to raise import duties on sunflower seed and oil from August 1, 2018 (from 13% to 27% and from 23% to 36%, respectively). However, the drop in the Turkish lira against the US dollar to an all-time low forced the country to restore the previous sunseed import duty rate of 13%.

In addition, in view of import dependence in the feed segment, a zero duty was imposed on meals and feeds.

Turkey remains a strategically important partner for the key exporters of sunflower meal – Ukraine and Russia – even though these two countries reduced shipments to the Turkish market in the current 2017/18 season by 30% and 9%, respectively.

Full version of the article is available to subscribers for weekly market report “Black Sea Vegoils” by UkrAgroConsult.

Further prospects of the Black Sea oilseeds/vegoils market will be discussed at the VI International Conference “Black Sea Oil Trade”, which will take place on September 20, 2018 in Hilton hotel, Kiev, Ukraine. Delegates from 20 countries have already registered for participation in the International Conference «Black Sea Oil Trade».

 

UkrAgroConsult

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