Turkish Grain Board Turkish Grain Board (TMO) is a state-owned economic enterprise that have undertaken important roles on market making of many products such as grains, legumes and nuts and operating the poppy monopoly since 1938 when it was established. TMO makes purchase / sale transactions of the agricultural products including majorly grains and other ones the board were tasked by following domestic and foreign markets closely and also ensures the healthy functioning of markets with import/export arguments when it is necessary. Thus; it provides the formation of a healthy relation between producer-consumer-trader and industrialist by preventing the producer and consumer from being suffered. WORLD GRAIN MARKETS Wheat World wheat production reached 696 million tons in 2013 with 41million-ton increase while it was 655 million tons in 2012. Wheat prices in that period tended to decline at the beginning of the harvest in parallel with the increase projections of 2013 production. USA wheat price tended to increase from mid-September because of the concerns about that the frost would give damage to the product in Argentina, that the rains in Black Sea Region caused quality problems and the strong import demand majorly from China. However; it decreased due to the acceleration of USA winter sowing starting from the first week of November and the declaration of USA final stocks more than the expected. As of the third week of November; the increase in the demand for USA wheat depending on that weather conditions in Australia would adversely affect the harvest and product quality and the concern that extreme cold in some regions of USA would give winter harms to the planted products caused the prices increase a little. Wheat prices in the Black Sea Basin (Russia, Ukraine) started to increase as of October due to the fact that the winter plantations were late, the ports were dense and the producers waiting for the price increase avoided selling their products. However; acceleration of the crop plantation together with the favorable weather conditions and the extensive intervention sales by TMO caused the expectation of decrease in Turkey’s demand for Russian wheat and thus the prices declined slightly. Corn World corn production, which was 863 million tons in 2012, reached 948 million tons in 2013 with 85 million-ton increase due to the expansion of cultivation areas and favorable weather conditions. Corn prices in the world markets have stabilized at its lowest level in the last 3 years with the record estimation of both world and USA corn productions in 2013 period. In 2013/14 season; USA as one of the important corn exporters for our region has realized 352 million tons of production, Ukraine has realized 28 million tons and Russia has realized 8,2 million tons. As a result of the increase and decrease in the production, it is expected in 2013/14 season that corn demand will increase and global corn trade will reach to 102 million tons. Barley World barley production, which was 130 million tons in 2012, reached 143 million tons in 2013 with 13 million-ton increase due to the expansion of cultivation areas and favorable weather conditions. Despite the increase in world barley production, global barley trade is expected to decrease to 19 million tons in 2013/14 season with 0,4 million-ton decline. The decrease in the demand for feed barley depending on the increase in the production of importer countries (especially Saudi Arabia) can be shown as the reason for the decline in the global trade. Rice World rice production, which was 469 million tons in 2012, reached 474 million tons in 2013 with 5 million-ton increase. A decrease is seen in 2013 world rice prices (especially in Thailand) depending on height of the production and stock levels. 2013 GRAIN PRODUCTION Turkey realized 20,1 million tons wheat, 7,1 million tons barley, 370 thousand tons rye, 2010 thousand tons oat, 4,6 million tons corn and 880 thousand tons paddy rice in 2012. It is estimated that wheat production reached 22,05 million tons with 9,7% increase, barley production reached to 7,9 million tons with 11,3% increase, rye production decreased to 363 thousand tons with 1,4% decline, oat production reached to 235 thousand tons with 11,9% increase, corn production reached to 5,9 million tons with 28.2% increase and paddy rice production reached to 900 thousand tons with 2,3% increase. (TUIK 2nd estimation) Total grain production, which was 33,4 million tons in 2012, is estimated to be 37,5 million tons with 12,3% increase in 2013. Turkey is in an advantageous position in terms of agricultural production due to its climatic and ecologic features allowing a wide range of products and it is in good condition in terms of self-sufficiency for the products bought by TMO. Turkey’s wheat consumption is 18-18,5 million tons, barley consumption is 6-7 million tons, paddy rice consumption is approximately 600 thousand tons, corn consumption is 5,5-6 million tons depending on the prices of substitute products and the production is adequate to meet consumption. The surplus wheat produced in our country is exported after being turned into finished good. LAST ONE-YEAR EVALUATION OF TURKISH GRAIN MARKET TMO; closely follows the markets for the Turkish grain market making, makes advance purchases by announcing intervention price when the market conditions turn against the producers, forms policies for the sustainability of the production and regulation of the markets by using deposit purchase and other intervention tools when the market conditions are in favor of the producers. Within this scope; TMO takes action by taking any kind of precaution necessary for the market making. 2013 grain harvest in Turkey started early compared to the previous year due to the temperatures above seasonal normal. Barley harvest started on 30th April in Southeastern Anatolia; wheat harvest started on 10th May in the Mediterranean Region. Within this scope; together with the harvest, purchases in exchange of covenant were started to be bought from all segments on 20th May until the intervention purchase prices are announced without the formation of market prices turning against producers. Intervention purchase and sales prices and purchase policies were announced on 7th June 2013. According to that; Anatolian Red Hard wheat intervention price was determined as 720 TL/Ton. This price was determined for the wheat with 11,5-12% protein content and the price for the wheat with 13% protein content, low sunn pest rate and high quality can be up to 742 TL per ton. Durum wheat purchase price was determined as 765 TL/Ton. This price is for the durum wheat with 12-12,5% protein content and the price for the durum wheat with 13,5% and higher protein content, low sunn pest rate and high quality can be up to 788 TL per ton. The purchase price for barley, rye, oat and triticale whose market conditions are in favor of the producers wasn’t announced in 2013 and purchases in exchange of covenant were made. The net price received by producers after including the bonuses and other subsidies given by our Ministry (Fertilizers, Soil Analysis, Certified Seed and Diesel Support) into the intervention purchase price announced in 2013, is (123 TL/Ton) 843 TL/Ton for Anatolian Red Hard wheat and (123 TL/Ton) 888 TL/Ton for durum wheat. 2013 period 1st corn harvest started in our country as of 1st August 2013. After the market prices started to turn against the producer (580-594 TL/Ton) together with the harvest, the deposit and advance purchases were started in all our offices by announcing the corn intervention price as 640 TL/Ton on 7th August 2013. Determined as 640 TL/Ton; the intervention price increases to 696 TL/Ton with the 56 TL/ton-bonus and other subsidies given by our Ministry. We applied full appointment system on corn purchases just like on other products. As of 28th 2013, our Institution made 1.305.112 ton advance and 18.248 ton deposit purchases. Average price of purchased corn was realized as 629 TL/Ton. The cost of the purchased 1.305 thousand ton is 796 million TL and 773 million TL of that amount was paid to the producers. The debt amount that is not due yet is 22 million TL. As of 28th November; Turkey’s 1st crop corn harvest rate was 97% and 2nd crop harvest rate was 58%. In the regions where corn demand from TMO is dense; current storage capacity, number of purchase points and daily purchase capacity were increased by means of hiring storage and drying devices from third parties in addition to the current storage capacities. Purchase system in shifts is applied on some points. Depending on the purchase density, the purchases are made 16 or 24 hours in those points working in shifts. While TMO realized 125 thousand tons corn at 37 purchase points (total 37 purchase points with 29 settled offices, 1 temporary purchase center and 7 storing units hired from third parties) in 2012, it realized 1.305.112 ton-purchase at total 137 points with 7 branch centers, 40 agency authorities, 18 teams with facilities, 5 temporary purchase centers and 67 rental storages in 2013. 50.646 tons of the purchases were realized at temporary purchase centers. Depending on the corn purchase density, the number of purchase points can be increased. From the period when corn harvest began to 28th November 2013, appointments for 1.540.251 tons of corn were made and within the scope of these appointments 1.305.112 tons of corn were sold to TMO. Rate of occurrence of the appointments is 85%. After this date, appointments for 202.613 tons of corn were made and purchase transactions still continue. 190 thousand-ton corn export tender was realized and sold by our institution on 24th October 2013. Paddy rice harvest in our country started on 8th September 2013 and was completed 7th November 2013. It is estimated that 74% of the total paddy rice produced in our country is Osmancık, 17% of Baldo and 9% of other rice varieties. Announcing intervention prices for paddy rice is unnecessary as the prices of paddy rice, which was traded in the market due to that there is no paddy rice stock in the markets before the harvest; imported product costs increase in parallel with the increase in Dollar exchange rate and the demand from consumers for local product increase, are above the prices projected by TMO. Tariff quota was allocated to TMO for 100 thousand tons rice import with zero customs duty to be used until 1st September 2015 with the Cabinet Decision dated as 26th April 2013. While the intervention prices are being announced; product costs (fertilizers, pesticides, soil preparation, planting, watering, maintenance, harvesting, threshing, land tenure and the costs of labor force and diesel, etc.), production quantity, economic indicators, wealth share, the sustainability of production, world market developments and the previous year’s prices should be taken into consideration. The product costs are determined by Agricultural Economics and Policy Development Institute of our Ministry. Within the applied purchase policies of TMO in 2013; 1.987.290 tons advance and 286.453 tons deposit grain (wheat, barley) purchases were made throughout Turkey. Besides; as of 28th November 2013, 1.305.112 tons advance and 18.248 tons deposit purchases of corn were realized. The average price of the purchased corn was 629 TL/Ton and 2013 corn purchases still continue. As it is mentioned above; our institution determines the purchase policies every year by closely following the grain production status in the world and Turkey and the grain markets. Having low levels at the beginning of the harvest, wheat prices increased following the announcement of TMO wheat intervention prices. Being around 720 TL/Ton between August and September across Turkey, AKS (Anatolian Red Hard) bread wheat prices tended to decrease starting from the beginning of November due to the effects of the increase in the demand of wheat with high quality in the sector in the recent periods and the price increases in Russia. After the extensive market intervention of our Institution in response to the upward trend in wheat prices, the prices are expected to decrease. The current market prices as of 28th November 2013 are 749 TL/Ton for wheat, 571 TL/Ton for barley, 595 TL for corn, 1.495 TL/Ton for 60-yield Osmancık paddy rice type.