Turkey buys European, Ukrainian wheat to replace Russian origin: traders


Turkish millers imported at least 500,000 mt of high protein wheat from alternative Black Sea and European origins for April shipment, trade sources said Friday on the sidelines of the Turkish Flour Industrialists Federation Congress in Antalya.

Turkish authorities on March 15 ditched tax exemptions of a 130% import duty on wheat imports from Russia. Since then the Turkish flour industry has found itself in need of diversifying its origins. “Turkey needs at least 400,000-450,000 mt of monthly imports of wheat,” a trader said.

Furthermore, April demand has already been covered from Ukraine, Hungary, Latvia and Lithuania, according to millers.

At least 100,000 mt of Ukrainian wheat has already been purchased, according to market sources. On top of that 50,000 mt of Hungarian wheat was booked as well as 350,000 mt of Latvian and Lithuanian wheat. Turkish millers said they preferred the quality from the small Baltic states than Hungarian and Ukrainian origin and is very competitively priced.

Indeed, offers of 14.0% protein wheat from Latvia and Lithuania were heard by S&P Global Platts as low as $218/mt CIF Mersin for Handysize vessels for May shipment. Hungarian wheat can be purchased at a similar price on CIF-Marmara according to traders.

However, these prices are still at least $10/mt higher than 13.5% protein Russian wheat, meaning millers are seeing some margins and profits fall due to the shift in procurement.

Russian origin is not the only one excluded from Turkey’s tax exemption list. Millers said German and Polish wheat are also excluded. The exact reasons for that remain unknown to the market, but there has been talk that this is a political decision to remove these origins.

The exclusion of these countries has sparked concerns about ending stocks in the small Baltic states as their annual exports are just a fraction of the export potential of Poland, Germany and Russia.

Latvian and Lithuanian annual exports for the 2016-17 marketing year are estimated at less than 2 million mt, according to traders.


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