Ahmet Güldal
Board Chairman and General Manager 
Turkish Grain Board (TMO)

In an exclusive interview with Miller Magazine, TMO General Manager Mr. Ahmet Güldal stated, “2023 was an exceptionally fruitful year for our country. Our wheat production surged to 22 million tons. Breaking our institution’s 85-year record, we made purchases exceeding 13 million tons. Our successful procurement policy from the previous year proved effective in steering farmers towards wheat. We managed to reverse the declining trend in planted area.” Mr. Güldal noted that there is currently no risk of drought for 2024, expressing optimism for another abundant harvest in the upcoming season.

2023 emerged as a pivotal year for Turkey’s grain sector, marked by unprecedented accomplishments. After a decline to 17.7 million tons in 2021 attributed to drought, Turkey’s wheat production rebounded to 22 million tons in 2023. It wasn’t just wheat; barley, corn, and various other crops also flourished, culminating in Turkey’s historic grain production exceeding 42.2 million tons, a record high. The Turkish Grain Board (TMO), a favored avenue for the Turkish farmer to sell their crops, broke its 85-year record by procuring over 13 million tons.

During an exclusive interview with Miller Magazine, TMO Board Chairman and General Manager, Mr. Ahmet Güldal, emphasized the significant abundance witnessed in 2023, attributing it to the impactful procurement policies enforced by the government. Güldal highlighted the reversal of the declining trend in planted area and the resurgence of farmers’ interest in wheat and barley, thanks to the concerted efforts of the Ministry of Agriculture and Forestry and TMO to ensure sustainable production of wheat, a strategic commodity. 

Mr. Ahmet Güldal, who has adeptly steered TMO, a pivotal entity in Turkey’s food security landscape, for over five years, delved into significant topics such as grain supply dynamics domestically and globally, geopolitical risks associated with grain trade, TMO’s strategic storage policy, and yield projections for 2024.

Below are the responses provided by Mr. Güldal to our questions:

You had mentioned that 2023 would be a year to manage abundance. It has indeed turned out to be a year of record production in grains, especially wheat. Could we receive a brief evaluation of the 2023 season from you?

In 2023, we witnessed a season characterized by abundance, both on a global scale and within our own borders. Worldwide, production figures soared with 788 million tons of wheat, 146 million tons of barley, and a staggering 1.2 billion tons of corn harvested.

Looking at the situation in our country, the successful procurement policy we implemented the previous year effectively encouraged our farmers to focus on wheat. Although the lack of sufficient rainfall across the country until mid-February caused some concern, thankfully, the rains received later resulted in a yield that brought smiles to both us and our producers.

Certainly, as you know, the government implements preferential treatment for wheat. Wheat, being the most strategically important product globally, holds significant importance for our country as well. Consequently, we shape our procurement policies within the framework of the general policies set by the Ministry of Agriculture and Forestry. In 2023, the grain procurement prices we announced were above market rates, ensuring that our producers received fair compensation for their efforts.

Consequently, the abundance of the harvest coupled with favorable TMO prices has bolstered confidence in us. Following the price announcement by the President on June 6th, we witnessed a surge in purchases. Over the course of this extraordinary period spanning approximately 5 and half months, we surpassed the record of our 85-year history by procuring over 13 million tons.

This year, we have elevated the daily average of grain purchases from 110 thousand tons to over 200 thousand tons. Our dedicated staff worked tirelessly, including late nights and weekends, without regard for conventional working hours. We ensured accessibility to our producers by establishing buying points even in the most remote areas of our country. Serving our producers at 614 buying points, we scheduled over 670 thousand appointments. Our payments exceeded 100 billion Turkish Liras. In essence, we set records in purchase volume, the number of buying points, payment amount, and personnel deployment. This achievement marks a milestone in the history of our institution, a feat I have proudly acknowledged on various platforms. Successfully executing such a massive procurement campaign is no small task. Yet, with our 85 years of experience and the dedication of our selfless personnel, we have fulfilled this duty with excellence.

STOCK MANAGEMENT ENTERS A NEW ERA

After this abundant season, there has been a notable increase in stock levels. How is TMO managing this surplus, and what measures have been taken?

As I mentioned earlier, the amount of grain we have procured this season exceeds 13 million tons. This is a significant responsibility, both in terms of physical handling and financial management. As I always emphasize, we consider our national resources as a sacred trust. We are fully aware of this responsibility. We have put in considerable effort to fill our stocks, but our duty does not end with the procurement of the products. Ensuring the proper storage and preservation of these goods until they enter the market is equally vital. Our top priority is to maintain the integrity of these national assets and keep them readily available for use whenever our country requires them.

We are actively present in the field to ensure the safe and secure storage in our warehouses, which have reached a record number this year. Our activities in this regard are carried out through the coordinated efforts of our central and provincial organization personnel. We regularly gather with our staff to conduct situation checks.

With 85 years of experience, we have implemented additional measures for the first time this year in our warehouses while managing our inventory. While warehouse inspections are routine for us, this year we have elevated them to a higher level. Our team of 93 individuals, comprising consultants and chief specialists, conducts frequent visits to the warehouses. They take notes and document the current status with photographs. This ensures that besides our operational and supervisory team, an additional set of eyes thoroughly inspects all our warehouses. Furthermore, we have enhanced both the human resources and technological capabilities in warehouse security. Our fully equipped camera surveillance system and state-of-the-art sealing technology contribute to this effort. We determine our course of action through comprehensive situation assessment and progress meetings.

From a global perspective, how would you summarize the current global situation in terms of world grain supply (wheat, maize, rice) in the new year?

The initial projections for the 2024/25 marketing year are beginning to emerge, particularly regarding wheat. Despite a minor decrease in wheat acreage worldwide, the anticipation is for an increase in global wheat production due to enhanced yields. Reports suggest that Russia, the leading wheat exporter, could achieve its third record production figure by producing 90-92 million tons of wheat in the 2024/25 MY. However, it is crucial to closely monitor climate conditions for more accurate final forecasts. 

TURKEY’S ROLE IN SHAPING ALTERNATIVE TRADE ROUTES

Grain prices have seen a decline in the past year, but they remain sensitive to supply shocks. From a geopolitical perspective, what are the potential risk factors in this regard? What policies is TMO pursuing to overcome the challenges posed by external factors?

After the onset of the Russia-Ukraine war in February 2022, the global attention shifted to this region. The conflict between these two key players in the grain trade resulted in a surge in world grain prices. The activation of the grain corridor as of July 22, 2022, helped alleviate the price hikes amidst the war conditions and contributed to global food security. However, even after the corridor ceased, the accumulation of stocks worldwide and the abundant yields in major producing countries continued to exert pressure on prices. While the ongoing conflict in the Black Sea region remains a risk factor for trade, product supply persists.

Beyond the Black Sea, we also observe developments in other parts of the world that occasionally restrict logistics capabilities. For instance, the heightened security risk in the Red Sea may influence trade routes through this region.

Turkey holds a central position in all these developments due to its geopolitical location. To the north lie exporting countries, while to the south are importing countries. Our geographical location allows us to intervene in alternative routes and product supply networks, thereby enhancing Turkey’s trade potential and opportunities. Additionally, considering the ample grain supply in our country this year and TMO’s record purchases, we view this season as a period of self-sufficiency for Turkey. Therefore, it is possible to say that external factors did not affect the supply situation in our country during the current season.

INCREASE IN STORAGE CAPACITY LED BY TMO  

Grain storage plays a critical role in ensuring food security. Could you please discuss Turkey’s storage capacity and TMO’s projects related to this matter?

In recent years, healthy storage of products, pest control, minimizing product losses due to storage, and establishing safety stocks have become increasingly important worldwide. These measures aim to prevent sudden fluctuations in food prices and minimize the impact of food crises on our country. 

Our country first encountered modern silos and enclosed warehouses in the 1940s under the leadership of TMO. Since its establishment in 1938, TMO has not only been involved in storage activities but has also taken the lead in product preservation, pest control, trade, and successfully managed the task of regulating the markets. With its wealth of knowledge and experience accumulated over the years, TMO stands as the foremost institution in the grain sector in our country.

The increasing grain trade has led to wheat being traded as an investment instrument in the markets. Additionally, the political instability and wartime conditions in our neighboring countries have once again underscored the strategic importance of wheat.

The growing private sector has initiated the construction of its own grain warehouses to meet the demand for raw materials and reduce dependency on foreign sources. Currently, modern grain warehouses are being constructed in various parts of the country.

TMO has taken the lead in implementing licensed warehousing, which will bring several benefits to the farmer, the trader, and the industrialist. In line with this, the “TMO-TOBB Agricultural Products Licensed Warehousing Inc.” was established in 2010 through the collaboration between our Agency and TOBB (Turkish Union of Chambers and Commodity Exchanges) to spearhead the sector in licensed warehousing.

With the support, incentives, and premium policies implemented by our Ministry, along with TMO’s procurement practices at locations where licensed warehouses are situated, and the initiative to promote warehouse construction within the private sector, investments in licensed warehouses have gained momentum in our country.

As of today, the capacity of licensed warehouses has reached 10.1 million tons across 264 locations. Additionally, TMO possesses warehouses totaling 4 million tons. During the procurement period, we primarily utilized our own warehouses and licensed facilities. In cases where our storage capacity was exceeded, we conducted our operations using rented warehouses. In this regard, we leased 2.5 million tons of closed storage facilities. Furthermore, TMO has successfully employed an alternative storage solution known as the open bulk storage system, acquiring extensive experience in this field throughout its historical journey. As part of this initiative, we leased an open stack storage area with a capacity of 6.5 million tons.

In total, when considering TMO-owned warehouses, licensed facilities, and leased storage spaces, we currently boast a storage capacity of 16.5 million tons in addition to the 6.5 million tons provided by open bulk storage. Moving forward, TMO will continue to guide investors interested in establishing licensed warehouses in our country toward areas where demand is present, as we have done in the past.

What are the primary areas of focus for TMO in terms of sustainable grain production and food security? What specific initiatives are being undertaken in these areas?

TMO primarily operates as an institution responsible for regulating the grain market. However, it also evaluates the food sector as a whole to ensure food security in the country, prioritizing the implementation of all necessary measures both domestically and globally.

Our Agency actively contributes to ensuring food security in the country by regulating the market to safeguard the interests of all stakeholders, including producers, industrialists, traders, and consumers. We achieve this by monitoring the operation of both domestic and international markets from production to harvest.

Since 1938, our Agency has been engaged in activities involving 30 different crops, applying various regulatory methods, continuously enhancing its implementation techniques, and keeping abreast of new practices. Indeed, we endeavor to enhance quality in sustainable agriculture through the latest practices that we institutionally implement and develop each year.

DECLINE IN CROPLAND REVERSED

2023 proved to be a notably fruitful year for our nation. After dropping to 17.7 million tons in 2021 due to drought, our wheat production rebounded to 22 million tons in 2023. This reversal in the downward trend of our sown areas was achieved through the implementation of policies by both our Ministry and our Organization to ensure the sustainability of production. Particularly, durum wheat flourished this year, bringing optimism to the country. From 3.15 million tons in 2021, our durum wheat production escalated to 3.75 million tons in 2022 and further to 4.3 million tons in 2023. Observations indicate that our barley production, which stood at 8.5 million tons in 2022, increased by 8.2% compared to the previous season, reaching 9.2 million tons.

The key areas TMO emphasizes regarding sustainable grain production and food security include:

 As is the case every year, we have announced our procurement prices, which have been determined considering the relevant cost factors and numerous variables to fairly compensate our producers for their efforts.

 Effective June 6th, TMO procurement prices were declared by the President at 8,250 TRY/ton for milling wheat, 9,000 TRY/ton for durum wheat, and 7,000 TRY/ton for barley. Additionally, our Ministry has announced that in addition to these prices, registered producers in the Farmer Registration System (ÇKS) will receive a premium of 1,000 TRY/ton for wheat and 500 TRY/ton for barley, rye, oats, and triticale.

Subsequently, our procurement price for corn was announced at 6,000 TRY/ton, while for paddy rice of the Osmancık variety, it was set at 20,000 TRY/ton. 

The combination of high yields and our announced procurement prices has resulted in a significant increase in demand from the farmer to sell their products to TMO. Under the slogan “until the last product arrives,” we mobilized all our organizational resources. As a result, we reached a daily average of 200 thousand tons in purchases, doubling the figures from previous years, which ranged around 100-110 thousand tons. With 2500 personnel involved in the purchase operations and 614 purchasing points nationwide, we have been able to serve and continue serving the farmer effectively. Leveraging TMO’s expertise and the dedication of our staff, we have broken all-time purchase records. The farmer’s contribution, delivering over 13 million tons of products to our organization, fills us with pride. 

TMO remains committed to supporting various initiatives aimed at harnessing the country’s potential, extending beyond the grain sector to encompass the entire agricultural industry, as it has done in the past. We assess all these innovations and measures undertaken by our organization in the context of promoting sustainable agriculture and ensuring food security, aligning with global developments. Our efforts are directed towards advancing these goals and objectives. As TMO, we are committed to serving with our entire organization for the sustainability of production and market stability this season, just as we have done in every period.

ANOTHER BOUNTIFUL HARVEST SEASON ANTICIPATED IN WHEAT

It is known that TMO teams are consistently active in the field. Based on the information you receive, what are your expectations for wheat yield in the upcoming season? How does the sowing picture compare to last year?

We commence tracking the products within our field of operations from the moment of planting. Our proficient teams diligently monitor the progress of these products in the field, compiling detailed reports accordingly. These reports are periodically disseminated to enlighten the industry. They hold significant importance, offering insights into both yield projections and necessary preventive measures. Based on these preliminary reports, which serve as indicative data for the forthcoming year’s yield, we not only inform our Ministry but also chart our course of action. For instance, in the event of a looming drought risk, we proactively anticipate its impact on yield months in advance, promptly implementing measures to avert supply shortages. Similarly, if issues such as pests or diseases jeopardize growth, pertinent entities like agricultural chambers disseminate information to farmers, enabling them to take preventive measures and foster healthier crop development. Thus, TMO’s persistent field presence, coupled with its vigilant monitoring of plant development and meticulous evaluation of meteorological data to compile reports, serves as a beacon for the sector, fostering a path towards robust and sustainable production.

Last year, we experienced a highly productive and abundant season, and naturally, we hope for the same in 2024. According to the phenological report released by our institution in November, Turkey witnessed its wettest November in the past 34 years. There was a notable increase in precipitation across all regions, with the Marmara, Aegean, and Eastern Anatolia Regions receiving more than double the normal rainfall. This is indeed a promising development for agricultural production. Our colleagues also observed that plant emergence continued to progress normally. Furthermore, the December report indicates that precipitation in 2024 exceeded both the normal levels and that of the previous year. Cereal plantings have nearly concluded nationwide, and we are noticing a significant inclination towards cereal crops among our farmers. In other words, there is currently no drought risk for 2024. However, it is worth noting that our organization’s technical staff, through field examinations and observations, have identified intense activity of mice and moles in cultivated areas. Their populations have increased compared to previous years, likely due to the higher-than-average air temperatures throughout the country this year. It is crucial to address this issue with sensitivity and take necessary measures promptly. If no climatic issues arise in the coming months, we can confidently anticipate another bountiful season ahead.

TMO SUPPORTS WORLD-LEADING TURKISH FLOUR INDUSTRY

It is know that TMO values sectoral collaboration immensely. In line with this principle, what messages or advice would you like to convey to the Turkish flour industrialists regarding the significance of cooperation and the role they can play in fostering the growth of the milling industry? 

TMO has been a fundamental institutional presence since its inception, closely monitoring and evaluating the country’s dynamics. Turkey boasts a rich heritage in milling, a profession passed down through generations. Throughout its historical journey, TMO has shouldered responsibilities in flour production and distribution, forging close partnerships with the milling sector as part of its institutional identity. 

With a deep appreciation for this heritage, we prioritize consultation with the sector. Indeed, our flour industry significantly bolsters the overall economy through its employment opportunities and foreign trade revenues. Moreover, our prominent position in global flour exports facilitates the entry of Turkish flour into the markets of over 140 countries. 

It is crucial for this success to continue to grow. This process represents a significant experience involving the collaboration of the producer, the public sector, and the private sector. We prioritize and endorse this collaboration. Our producers play a central role here. Ensuring the sustainability of wheat production, a strategic commodity, is an area of responsibility shared by both the public and private sectors. 

We are closely monitoring the developments in this sector and will continue to do so. The sector can rest assured that we, as the public sector, will fulfill our responsibilities without fail. Our communication channels with the sector will remain open at all times. We are committed to supporting their development and enhancing their competitiveness in the international market.