"We expect price fluctuations in foreign markets will continue because of the coronavirus crisis. Measures about international trade will determine prices. Governments will choose to increase strategic stocks. İmportance of e-commerce will increase for food and agriculture. Demand for staple food like flour, pasta, rice, bulgur, and pulses will increase."

İK Tarımüssü International Consultancy

The coronavirus pandemic that has shaken the world and prevented day-to-day activities has also affected the agriculture and food sector deeply.

On the one hand, food security and safety are deemed to be more important now.

On the other hand; price fluctuations have increased because of physical limitations, regulatory restrictions, and deteriorating market expectations. As demand for food increased, hunger and poverty have deepened.

How should we evaluate the agriculture and food sectors in the light of these developments?

First of all, as the significance of agriculture and food increases, humankind started to redefine its perception about the environment, the land, and nature and rethink its superiority against nature as the effects of climate change and global risks continue to be more apparent.

12 million hectares of land, which is as large as Italy, turns to non-agricultural land each year around the globe because of urbanization, erosion, and industrialization. It is high time we question these phenomena in terms of the future of humanity.

Agricultural land in the world can easily feed the whole population in the world in normal circumstances. Potential agricultural land constitutes 4,2 billion hectares of 13,2 billion hectares land of the earth.

But only 38% of the potential land is being used for agriculture today. We have great potential to fulfill. We need to state that the future of humanity is not so bright without paying the necessary attention to the land, agriculture, and the environment.

So it may be an opportunity for us that the Covid-19 process makes it clear that agriculture and food are vital for all.

Secondly; it seems there are no physical constraints for seeding or harvesting processed for staple crops.

Because wheat, corn, rice, pulse, and oilseed production processes are machine-intensive agricultural activities and we don’t need too much manpower.

So we don’t expect any disruptions for production because of the Coronavirus crisis.

But the need for intensive manpower for vegetable and fruit picking creates some problems. In Europe, Ukrainian seasonal workers cannot go to Poland.

Much needed Georgian and Azerbaijani workers cannot travel to Turkey for tea harvesting. Even Turkish tea growers living in other regions of the country cannot go back to their land for the harvest season.

National and regional governments now try to create some solutions to ensure agricultural activities to go on.

Thirdly; deteriorating market expectations create problems for the agriculture and food sector and there is no gap between supply and demand.

We expect global production rise for grains, pulses, and oilseeds. Global wheat stocks have exceeded 180 million metric tons. But restrictions and limitations cause price hikes.

Global grain planted area was 545 million hectares in 2018-19 season and it is 558 million hectares now at 2020-21 season. Production is expected to increase from 2.142 billion tons to 2.222 billion tons.

Soybean plantation area has also been increased by 2 million hectares to 128 million hectares and production is expected to reach 366 million tons by a rise of 4 million tons.

SO WHAT ARE THE RISKS AND OPPORTUNITIES?

A total of 88 countries introduced export bans for several food products. 30 countries limited agriculture and food product exports or facilitated imports.

Ukraine had declared that it will stop maze exports but canceled this decision soon after it became clear that there are no supply shortages for maize in the local market.

Russia banned grain exports until July since export quota of 7 million tons has already been reached.

30 countries including Serbia, Kazakhstan, Ukraine, Egypt, and Thailand declared restrictions for exporting a wide range of products like onion, garlic, rice, edible oils, grains, buckwheat, processed agricultural products, sugar, chicken meat and so on.

These decisions will have global effects because Russia and Ukraine wheat constitutes 20 percent of the wheat traded in the world.

International institutions like the World Trade Organization and the UN Food and Agriculture Organization have warned against measures restricting trade and access to food.

US, Australia, Ukraine, Romania, and 20 other WTO members made a joint statement for the free flow of agriculture and food products in the world. Currently, 44 countries in the world need food support.

We expect price fluctuations in foreign markets will continue because of the coronavirus crisis and...

• Measures about international trade will determine prices, • Governments will choose to increase strategic stocks, • Technology and mechanization in agricultural activities will increase, • Technology and digitalization will be more on the agenda, • İmportance of e-commerce will increase for food and agriculture, • Ornamental plants, horticulture, meat, vegetable-fruit, out-of-home consumption will tend to decrease, • Demand for staple food like flour, pasta, rice, bulgur, and pulses will increase, • Agricultural land will be more precious, • Regional logistic hubs will be more important, • Bilateral agreements and agricultural cooperation will gain importance, • Financing agriculture will be among the most critical issues.

How can we evaluate the recent trends in terms of their effects on Turkey?

Most of the main agricultural products are originated from the area where modern-day Turkey was established. Turkey is superior to its competitors in terms of some grain-based products and pulses.

Turkey is the largest flour exporter and second-largest pasta exporter globally. When we take all grain-based products into account, Turkey is among the 3 largest exporters with 5,5 million tons of finished products in 2019.

Food shortage has not been an issue since the Coronavirus pandemic began and stocks will be available until the new harvest season.

Let’s have a look to the figures as the new harvest season approached; • durum wheat planted areas are expected to increase by 10% and wheat planted areas by 1 to 2 percent. Barley planted areas will increase by 5%. • weather conditions have been largely positive for planting, • the yield is expected to rise by 2 to 3 percent year-on-year, • red lentil planted areas will grow by 20%.

Now as a result of currency depreciation, local raw materials are cheaper in Turkey compared to international prices.

This is an important situation in terms of market developments and price movements during the harvest season.

There are also important risks like; shrinking grain planted areas, tendency to use fertile lands for perennial plants (citrus and fruit trees at Cukurova, grapes at the Agean region, etc.), increased feed imports as a result of corporatization of husbandry. Agricultural exports of Turkey have a value of 18 billion dollars but 55% of that is in the scope of the inward processing regime.

In terms of pulses, there is a production surplus for chickpeas but gap far haricot beans and lentils.

Current problems for the sector can be listed as logistic issues, container availability, restrictions for truck movements, decreased demand for some products (fish exports decreased by 40%).

The Turkish tourism sector, which is a significant revenue source, is experiencing heavy issues.

On the other hand, Turkey might have advantages to export some products as an agriculture, food, and trade hub.

Turkey may have the opportunity to export more grain-based finished products, frozen food, pulses, and vegetables-fruits and may supply the United Nations more food products to be sent for aid.

Turkey will be a regional hub for shipment of agricultural products thanks to global and regional projects like the Baku-Tbilisi-Kars railway.

It has also potential to be a regional hub for commodity exchange and electronic trade of agricultural products. Turkey Specialized Products Exchange has been taking firm steps to achieve this goal.