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Grain, Pulses and Flour Market in Turkey

04 May 201514 min reading
There are nearly 700 flour mills in Turkey. Actual production in this actively operating 700 flour mills is 12 million tons. While the average capacity use of the flour mills in the world is 65 percent, this rate is 45 percent in Turkey. Regions that Turkey, largest flour exporter, sells flour are Middle East, Far East Asia and Africa. wesitanbull Being an intersection point in many aspects, Turkey is one of the few countries which are self-sufficient in food production thanks to its geographical position and product range. Turkey’s fertile lands and climate which is suitable for agriculture and sufficient rainfall enable it to grow nearly all kinds of crops. Turkey where agricultural activities are seen in almost every region of it is one of the most significant countries in the world in terms of agriculture. According to the data of World Bank, arable land covers 31 percent of the country in 2010. After 1930s, the industrialization process of Turkey has gathered speed and the share of agriculture in economy has decreased along with the policies of the government. While the share of agriculture was 50 percent in 1950s, this rate decreased to 25 percent in 1980s and 11 percent in 2000s. Currently, the use of modern agricultural instruments is encouraged by the government and some structural changes are being made for a better irrigation system. Agriculture still has an important place in Turkey’s foreign trade activities, although its share in economy has decreased in the last 30 years. GENERAL ECONOMIC OUTLOOK OF TURKEY Turkey which is counted as “emerging market” by International Monetary Fund (IMF) is a free market economy. Turkey is also counted as among the “developed countries” in CIA World Factbook and at the same time, it is considered as one of the newly industrializing countries by a lot of economy and politics experts in the world. According to the CIA Factbook, Turkey whose total gross national income (purchasing power parity) is 1,167 trillion dollar in 2013 is the 17th largest economy among the world countries. Of the total gross national income, 8.9 percent is agriculture, 27.3 percent is industry and 63.8 percent is service industry. Turkey’s per capita income in 2013 is 15,300 dollar. Lots of privatization activities have been conducted in recent years in order to create a competitive market in Turkish economy. International investors have been encouraged to participate in these privatization activities aiming at confining the role of the government in areas such as health, basic education, social insurance and national defense. According to the data of T.C. Ministry of Foreign Affairs, a new system enacted in 2012 enabled more foreign investment and in 2012, direct foreign investment in the country exceeded 130 billion dollar. Of total labor force in Turkey, 25.5 percent is agriculture, 26.2 is industry and 48.4 is service sector, According to CIA Factbook. Leading sub-sectors in industry of the country are as follows: textile, food processing, machinery, electronics, mining, steel, construction and lumbering. THE PLACE AND IMPORTANCE OF AGRICULTURE As it is mentioned above, thanks to its suitable climate and geographical conditions, Turkey has become one of the world’s leading countries in terms of food and agriculture. According to the 2014 Agriculture and Food Industry Report released by T.C. Ministry Investment Support and Promotion Agency, the food and agriculture sector which is growing every year is 9 percent of gross value-added (GVA) in 2012. Turkish food and agriculture sector including 25 percent of total labor force in the country ranks as 9th in the world in terms of agriculture’s share in GVA. Infrastructure activities in agriculture which started in 1980s led up the commercial restrictions in agriculture sector to decrease, privatization activities to increase and Turkey’s domestic market which has a significant role in global economy to be formed. Factors like young population of the country, mobility of private sector, favorable climate conditions play an important role in changing dynamism of this sector. Agricultural production in Turkey has continued through the small lands for a long time. However this situation is likely to change in the future. Although it seems that traditional farming methods still continues, more modern technics are likely to be seen in agriculture thanks to the EU harmonization process. It is known that investments and supports such as Southeastern Anatolia Project (GAP) made contributions to these changes. Turkey which has become a self-sufficient country in food production since 1980s takes place near the top in the production of various agricultural products in global markets. However the share of agriculture in total economy has showed a decrease within years. According to the data of Food and Agriculture Organization of United Nations (FAO), Turkey is the leader producer of some fruits such as nuts, cherry, fig, apricot, quince and pomegranate and dry fruits such as dry apricot, seedless raisin, dry fig. It is the second largest producer of watermelon, cucumber, chickpea and third largest producer of eggplant, green pepper, lentil and pistachio. Also it is one of the 10 largest producers in the production of onion, olive, apple, tomato, sugar beet, barley, almond, wheat, rye and grapefruit. GRAIN PRODUCTION IN TURKEY According to the data of Turkish Statistical Institute (TUIK), the most produced grain product in Turkey is wheat. There has been no significant rise in wheat production between 2004 and 2014 despite some critical decreases. Wheat production of Turkey was around 21 million tons in 2004 and 2005. This amount decreased to 20 million tons in 2006 and 17,5 million tons in 2007 and 2008. Turkey’s wheat production which increased to 20 million tons in 2009 by rising again and decreased to 19,6 million tons was 21,8 million ton in 2011 and 20,1 million tons in 2012. The highest production amount was reached in 2013 with 22 million tons. According to the data of TUIK, wheat production in 2014 was also 19 million tons. Cultivated land of wheat which is the most important product in Turkey on the basis of production amount has been decreasing for years. Wheat which was cultivated on a land of 93 million hectares in 2004 has only been cultivated on 79 million hectares. Yet there has been a little rise in yields of wheat production. While yield in wheat production was 226 kg per decare in 2004, it increased to 240 kg in 2014. The second important product in Turkey’s grain production is barley. Barley production, cultivated land and yield have been decreasing since 2004. Barley production which was around 9 million tons in 2004, 2005 and 2006 has decreased to 7,3 million tons in 2007 and 5,9 million tons in 2008. Being around 7 or 8 million tons, barley production in Turkey receded to 6,3 million tons in 2014. Corn production, cultivated land and yields are gradually increasing in Turkey. It is believed that this increasing demand for corn is caused by its significant role in food industry instead of direct consumption. The production amount which was around 3 or 4 million tons between 2004 and 2007 increased over 4 million tons in 2008. In 2013, it has risen to 5,9 million tons and 5,95 million tons in 2014. While yield per decare in corn production was 550 kg in 2004 this amount increased to 903 kg in 2014. Cultivated land and production amount of rice which is another important grain in the country are rising gradually. The production of paddy rice which was 490 thousand tons in 2004 increased over 700 thousand tons in 2008 and has reached to 900 thousand tons in 2013. The production of rye and oats has not showed a significant change between 2004 and 2013. Both of them are produced in the amount of 200 thousand or 300 thousand tons. PULSES PRODUCTION IN TURKEY Turkey’s dry pulses production has showed a significant decrease in the last 12 years. This was not much reflected upon total pulses production although an increase was observed in yields. Cultivated land of dry pulses has also showed a decrease in a considerable amount in the last 12 years. Total cultivated land of pulses which was 12 million decare in 2003 receded to 7,2 million decare in 2012. It increased a little in 2013 and reached to 8 million decares. However, receding again, it decreased to 7,4 million decare. Regarding this, total pulses production has decreased to 400 thousand tons in the last 12 years. 1,4 million ton pulses production in 2003 also receded to 1 million tons in 2014. It is clear that the highest production amount belongs to chickpea among pulses. According to the data of TUIK, Turkey’s chickpea production which was 600 thousand tons in 2003 decreased to 506 thousand tons in 2013 by receding 150 thousand tons in the last 10 years. The highest production amount after chickpea belongs to red lentil. Red Lentil production which was 485 thousand tons in 2003 and increased up to 580 thousand tons in 2006 decreased to 106 thousand in 2008, and then reached to 395 thousand tons in 2013 by increasing a little in the following years. Red lentil production was 325 thousand tons in 2014. Another important product dry bean’s production amount receded gradually while it was 250 thousand tons in 2003 and decreased to 195 thousand tons in 2013. İt increased a little in 2014 and reached to 215 thousand tons. PLACE OF GRAIN IN FOREIGN TRADE Wheat is the most imported product among cereals in Turkey. According to the data of TUIK, wheat import was 135 thousand tons in 2005. Wheat import which rose to 2,1 million tons in 2007 and to 3,7 million tons in 2008 was around 2,5 million tons by decreasing a little in 2010. The highest import rate of last 10 years until 2013 was reached with 4,7 million tons in 2011. It decreased a little in 2012 and remained as 3,7 million tons. Then it increased again to 4 million tons in 2013. In accordance with the drought, decreased production amount caused wheat import of Turkey reached 5,2 million tons, the highest amount for the last 15 years. Turkey that is a self-sufficient country in terms of wheat carries import activities in order to provide quality wheat for products to export. Turkey export wheat as a processed product (flour, pasta etc.). Thus, grain-based wheat export is highly limited. Corn is the most imported and exported grain product after wheat. Corn import differed in years. When corn import of Turkey observed, a decrease can be seen in 2008, 2009 and 2010, according to the data of TUIK. It is believed that enacted regulations in 2009 had an effect up on this. As a result of these regulations, significant restrictions were imposed for import of genetically modified products. Corn is one of the primary products in this list. However, corn import started to increase and recorded as 807 thousand tons in 2012. Import amount continues to increase in 2013 and reached to 1,5 million tons. According to the data of TUIK, corn import amount is 1,4 million tons in 2014. Corn export of Turkey is highly limited in comparison to import amount. Since 2010, only in 2013, amount over 210 thousand tons can be observed. Apart from wheat and corn, other products which are imported among the grain products produced in Turkey are barley and rice. Import activities can be observed despite being low. While import amounts were 256 thousand tons for barley and 283 thousand tons for rice, it was 675 thousand tons and 493 thousand tons in turn during the drought. PLACE OF PULSES IN FOREIGN TRADE Decreasing in cultivated land of pulses and correspondingly decreasing in production amount have caused Turkey’s dry pulses import to increase. Total pulses import which was 271 thousand tons in 2010 increased to 334 thousand tons in 2013 and to 448 thousand tons in 2014. The most imported product among pulses is lentil. 141 thousand tons of lentils were imported in 2009. This amount increased to 210 thousand tons in 2010 and to 309 thousand tons in 2011. Lentil import decreased in 2012 and 168 thousand tons of lentils were imported. Import amount in 2013 was 199 thousand tons. It is estimated that this amount has risen significantly and reached to 303 thousand tons in 2014. The highest import amount after lentil in 2013 belongs to chickpea. Chickpea import which was 4 thousand tons in 2009, 7 thousand tons in 2010 and 8 thousand tons in 2011 increased significantly in 2012. Chickpea import was 34 thousand tons in 2012. This amount rose more in 2013 and increased to 57 thousand tons. It is estimated that 41 thousand tons of chickpea was imported in 2014. Import amount of dry beans which is the most imported product after lentil, chickpea and dry peas is decreasing gradually. After low import amounts, dry bean import is estimated to reach to 52 thousand tons by rising a little in 2014. Broad bean import of Turkey is also increasing. Broad bean import which was not even closer to a thousand tons in 2010, 2011, 2012 and 2013 is estimated to reach to 1,4 million tons in 2014. Lentil has the largest share in export in 2013 just as it is in import share. Turkey reached its largest lentil export rate in 2011 with 212 thousand tons. It receded a little in 2012 and decreased to 197 thousand tons. It also continued to recede in 2013 and 2014 and then lentil export was recorded as 178 thousand tons and 183 thousand tons. The second most imported pulses product was dry peas in 2013. Dry peas export was approximately 23 thousand tons in 2011 and 2012; it increased to 31 thousand tons in 31 thousand tons. It is estimated to decrease to 24 thousand tons in 2014. Chickpea export of Turkey shows a decrease in years. So, chickpea export which was around 56 thousand tons in 2010 decreased to 28 thousand tons in 2011 and 25 thousand tons in 2012. Chickpea export which continues to decrease in 2013 remained as 19 thousand tons. It seems that the export amount receded to 18 thousand tons in 2014. Dry bean export is quite low. Being 1,6 thousand tons in 2010, dry bean export amount was recorded as between 1300 and 2500 tons and then increased to 8800 tons in 2014, according to the estimations. FLOUR MILLING IN TURKEY It is believed that the first mills were used in Anatolia. This deep-rooted history enabled Turkey’s both flour and milling technologies production to be on the top in global milling sector. When the current production in Turkey considered, annual flour production remain highly above the consumption amount. According to the Flour Industry Report of 2012 prepared by Federation of Turkish Flour Industrialists (TUSAF), there are 700 flour mills in Turkey. Actual production in this actively operating 700 flour mills is 12 million tons. The average capacity use of the flour mills in the world is 65 percent. This rate is 45 percent in Turkey. It is seen that Turkey’s production capacity is far below its potential Regarding the distribution, most of the flour mills are in Central Anatolia Region. Of all the flour mills in Turkey, 28 percent is in Central Anatolia, 20 percent is in Black Sea Region, 19 percent in Marmara, 13 percent in Southeastern Anatolia, 7,5 percent in Aegean, 6,4 percent in Mediterranean Region. Considering the foundation and investment plans about flour mills, it is preferred to be close to the source of raw material, market and infrastructure. Wheat production and cultivation areas in Turkey were effective in selection of location for flour plants. Turkey is the largest flour exporter in global market as well as Kazakhstan. Turkey which has been on the rise since 2005 in terms of flour export reached to the flour export amount of Kazakhstan and EU countries. Turkey’s flour export which was 1,2 million tons in 2006, 2007 and 2008 increased to 1,8 million tons in 2009 and 2010. Proceeding to increase in 2011 and 2012, it reached to 1,9 million tons. Turkey’s flour export in 2013 was 2,1 million tons. It is also around 2,216 million tons in 2014. The regions that Turkey exported flour are Middle East, Far East Asia and Africa.
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