Turkish buyers put Russia wheat deals on hold, despite denial of ban - sources

20.03.2017

Turkish buyers have put purchases of Russian agricultural products - mainly wheat, maize (corn) and sunflower oil - on hold, despite denials from Ankara that it has effectively banned imports from Moscow, trade and industry sources said on Monday.

Last week, import licences issued by the Turkish government no longer included Russia in a list of accepted tax-free origins, the sources said, suggesting an import tariff of 130 percent could be applied to supplies from Russia.

Turkey's Economy Ministry said on Friday media reports it had banned imports of certain products from Russia were wrong.

However, one trader, speaking on condition of anonymity due to the sensitivity of the matter, told Reuters: "The exports from Russia to Turkey remain suspended. My understanding is that Turkish customs have instructions not to allow the discharge of vessels with Russian wheat, corn, sunflower oil and other grain and agricultural products."

According to that trader, and another, a delegation of Turkish milling companies plans to meet with the government and Turkey's state grain board TMO in Ankara on Monday.

Turkey is the second largest Russian wheat importer after Egypt and one of the largest markets for Russian maize and sunflower oil. For Turkey's flour millers, Russian wheat is one of the most important sources of supply.

"Nothing has changed so far, we are waiting and are not buying anything," a Turkish importer of Russian grains said.

Some market players said Turkey might be trying to speed up negotiations over tomato and other vegetable supplies to Russia, which Moscow is yet to resume despite an improvement in relations after an earlier dispute.

The disruption of supplies to Turkey could add further pressure to Russia's domestic grain market, which already has high stocks after a record grain crop a year ago, trade sources said.

It is also a chance for Ukraine, Russia's rival in grain supplies via the Black Sea, to build up its grain exports to Turkey, some of them added.

There was a spike of interest in Ukrainian grain from Turkish buyers last week, but no large deals have been signed so far because traders are waiting for more clarity from the Turkish side, two Kiev-based traders said.

Another reason is that Kiev does not have much wheat with high protein content - which Ankara prefers - to offer, the traders said.


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