“We announce a buying price for wheat that will boost production”

23 April 201913 min reading

“Before the harvest period in 2019, we will announce a price that will please producers and we will start buying around the country. A guarantee of purchase by TMO for a product is crucial for product sustainability. I hope that we will announce a price that will please producers and will contribute the increase in the production of wheat that is a strategic product for Turkey and the world.”

Ahmet Güldal
CEO and General Manager of the Turkish Grain Board

Ahmet Güldal was working in the Ministry of Agriculture and Forestry as a deputy secretary but on August 19, 2018, was appointed as the General Manager of Turkish Grain Board. With this background, he is someone that knows the challenges of the sector very closely. He completed his education at Erzincan Agriculture Vocational High School and Ankara University Agricultural Faculty and served in many roles ranging from provincial departments to secretaries. Ahmet Güldal was successful in overcoming problems by taking important initiatives in difficult times for the country and the sector.

Performing many roles in the agriculture sector in the last 30 years, Güldal speaks to Miller Magazine. “This season was particularly challenging because of fluctuations in production and macroeconomic developments. Nevertheless, we see positive results from our decisions and arrangements and helped markets to sail through this period without taking any hit,” he said, when commenting on the period he assumed the role.

He added that many people showed great interest in online sales via e-PTT (e-post) since January and pulses, chickpea, and green lentil were sold in regulated sale points around the country since February.

The following is the full interview with Ahmet Güldal, General Manager of Turkish Grain Board (TMO).

Mr. Güldal, you assumed the role of CEO and General Manager in a very challenging time. When you assumed the role, the wheat production began to fall in the world while the price was increasing, and there has been fluctuation in currency exchanges. You took important decisions to balance the market as TMO. Can you tell us about your works in this period? Yes, there had been sometimes real and sometimes speculative activities because of exchange rate fluctuation, increase in exchange rate, and climatic reasons during this year. The main duty of TMO is to prevent the prices of cereals and pulses from going under normal price for producers while from going abnormally high for consumers, take regulatory measures in the market of these products, and manage duties for other agricultural products other than cereals and pulses by the President.

We monitor domestic and international prices of products that are within our scope, and if necessary, we intervene in markets by announcing buying and selling prices or by not announcing or by announcing lately.

This season was particularly challenging because of fluctuations in production and macroeconomic developments. Nevertheless, we see positive results from our decisions and arrangements and helped markets to sail through this period without taking any hit.

What policies did you implement on a product basis? In Wheat and Barley; • At a very early date, we announced the purchase prices of wheat and barley, and in total, we purchased 2.44 million tons of cereal from 61 thousand producers. • After our purchases, our wheat stock reached 3.6 million tons with 1.3 million tons of turnover. • We started our wheat sales in early August taking into account the fluctuations in the market because of the decrease in production and the increase in the exchange rate, and so far we have sold about 3.1 million tons of wheat. • We did not raise our sales prices between August and October; from November to January we applied only 20 TL / ton rise per month; we kept our sales prices stable in February and March. • We reinforced our stocks with imports; we have not implemented any increase in imported product sales prices. • In order to carry out our market regulation task effectively and on time, we have been granted automatic import authorization every year. (The authorization for 1 million tons of wheat, 700 thousand tons of barley and corn, 100 thousand tons of paddy and 100 thousand tons of pulses is used only when the product supply is finished.) • We carried out a sale to small and middle-sized flour factories with 90-days deferred sale without applying interest. • We have sold low-quality wheat for the feed industry. • We have transferred the imported barley to the domestic areas to meet the needs of our breeders and growers, and we started to sell barley to our feeders and growers since January. • We started maturity practice in our sales since March. • To date, we have sold 94,000 tons of barley.

In Maize; • We announced our purchase price as 950 TL / ton on 14 October 2018 and we bought 184 thousand tons of maize. • Since January, we have reinforced our stocks with imports. • We started to sell maize in stock at a price of 1.075 TL / ton. • We have sold 208 thousand tons of maize so far.

In Paddy/Rice; • On November 14, 2018, we announced 2.600 TL /Ton for 60 output Osmancık, 2.400 TL/Ton for Ronaldo and Vasco, and 2.200 TL/Ton for Luna; so, we bought 432 tons of paddy. • We reinforced our stocks with import since December. • For our consumers, we have started to sell rice at a price of 4.50-5.70 TL / kg that is 20-40% lower than market prices so that customers can buy rice at an affordable price. • We also delivered domestic rice from our stocks to our people via regulated sale points. • So far, we have sold 5 tons of paddy and 8 tons of rice.

In Pulses; • After 25 years of hiatus, we have intervened for chickpeas and green lentils in order to prevent the price decline for the producer’s benefit due to excess supply. • As part of that, we bought 96 thousand tons of chickpeas and 14 thousand tons of green lentils. • As of October, we have started to sell the products for retail markets below than natural and market prices. • In order to stimulate demand in our sales, we started to implement maturity from November. • In order to generalize our retails sale that is 20-40 percent lower than the market price at 150 sale points and to ensure people can consume pulses with affordable prices, we have reached an agreement with PTT and started e-trade. • We supplied chickpeas and green lentils to the regulated sale points under the Fight Against Inflation Program. • So far we have sold 7 thousand tons of chickpeas and 4 thousand tons of green lentils.

We are close to wheat harvest. World grain production is expected to decrease. What about Turkey? What is the prediction about wheat production? Last year there was a problem with quality. How is the view so far this season? Although the world wheat production fell in 2018/19 season, the production figures are expected to recover in the new season. The first estimates for the 2019/20 season indicate that world wheat production will increase by 15 million tons and will reach to 751 million tons. In this context, no shrink in wheat supply is expected in the world in the upcoming season.

In our country, the bad weather conditions experienced in the previous year did not take place this season. If the weather conditions go normal during the spring terms, we can say that our production will be at the same level as the previous year.

In 2018, 20 million tons of wheat and 7 million tons of barley were produced.

Seeding for winter wheat has been completed while planting for summer recently started. For the 2019 production season, there will be a bit decrease in wheat plantation while there will be an increase in barley plantation.

For production, the rainfall in the spring, state of the climate and conscious farming will be decisive. For the forthcoming process, producers are recommended to carry out top fertilization, weed, and fight against sunn pest, which negatively affects the wheat quality in Turkey.

In 2018, based on the climate and farming, there will be a decrease in protein and hectoliter in bread and durum wheat compared to the previous year. Also, there will be a bit increase in sunn pest’s damage.

Turkish Grain Board switched to purchasing based on quality since 2011, and with the effect of this practice, although wheat quality varies according to climatic conditions, it is increasing every year.

In order to minimize the quality loss because of sunn pest’s damage for the 2019 production period, the ministry will carry out the necessary monitoring and enable an effective fight against the sunn pest. The quality and efficiency of the product will increase so that the product can be marketed at a higher price.

Can you give information about 2019 cereal purchases and prices? TMO guarantees the purchase of the product which was registered to the farmer’s system. TMO established temporary purchasing points where there is no free market and cereal buyers and carried out this purchasing through licensed warehouse which increased the capacity in every year because of the government and the ministry’s support. We will continue our purchases in the same way in order to prevent the manufacturer’s victimization.

Before the harvest period in 2019, we will announce a price that will please producers and we will start buying around the country. A guarantee of purchase by TMO for a product is crucial for product sustainability. I hope that we will announce a price that will please producers and will contribute the increase in the production of wheat that is a strategic product for Turkey and the world.

VIA PTT, WE SOLD 400 TONS OF CHICKPEA AND GREEN LENTIL IN TWO MONTHS TMO supports the fight against inflation. In pulses, a regulated sale has started. A protocol with PTT has been signed for online retail sale. At this point, can you talk about your works and the feedback you receive? How did people react? Yes, in line with the fight against inflation, we started to sell pulses that we bought from the producers 20-40 percent lower than the market price in 2-kilogram packages. Initially, we started to sell the products at 150 points across the country. We started to sell online via e-PTT since January so that consumer can consume pulses at a cheaper price. So far, we sold 211 tons of chickpea and 189 tons of green lentils.

In order for people to have access to vegetable and fruit at a cheaper price, the regulated sale has started. At these points, pulses we bought from the producers are being sold to the consumers a price lower than the market price. We are happy about people’s reaction. Since the start of sales, the demand for 600 tons of chickpeas, 500 tons of green lentils and 174 tons of Osmancık rice came in almost 15 days.

Meanwhile, as TMO, while our people consume cheaper food, we want to increase the consumption of pulses in our country due to the fact that pulses have an equivalent protein value to the meat.

THE CAPACITY OF LICENSED WAREHOUSING REACHED 3.3 MILLION TONS The most important move of TMO is the generalization of licensed warehousing named as “dams of agriculture.” Can you talk about the contribution the licensed warehousing will bring and the stage of your works? As we know, the licensed warehousing system spreads the production supply to a year, enables the protection in healthy and secure environment with modern warehouses, enables more buyers and seller come together because there will be stock exchanges, and makes easier the product trade, and provides credit system which means a financial support for producers. The licensed warehousing system will be a profitable investment for producers, traders and industrialists, a significant investment for the agricultural sector and therefore a great gain for our country’s economy.

In order to meet the warehousing need and generalize the licensed warehousing system, TMO started rent guaranteed warehouse construction project in 2016 and signed agreements to construct warehouse with 2.3 million tons of capacity that meets the licensed warehousing criteria.

In addition to the incentives and support of our government, licensed warehouse capacity has increased exponentially since 2016 as a result of the policies and extension activities implemented by TMO. In the cereal field, the licensed warehouse capacity reached a total of 3.3 million tons at 85 points.

TMO carried out 5 percent of its purchase (222 thousand tons) in 2016, 15 percent of its purchase (334 thousand tons) in 2017, and 47 percent of its purchase (1.3 million tons) in 2018 via licensed warehousing with Electronic Product Note (ELÜS).

TMO aimed to carry out all of its purchase through ELÜS and continues the work to generalize the licensed warehousing, to increase the capacity of licensed warehousing, and to carry out ELÜS trade on the international level.

Today, 67 licensed warehousing companies carry out their works in 90 points with 3.3 million tons. There are 85 cereals, 2 kinds of cotton, 2 olive and olive oils, and 1 nut. Cereal: 3.275.827 tons and 63 companies. Cotton: 37.000 tons and 2 companies. Olive: 13.500 tons and 1 company. Nut: 17.000 tons and 1 company.

TMO also provides humanitarian aid abroad under the decision of the Council of Ministers. Could you please tell us about these aids? TMO is tasked to provide flour to needy countries because of natural disaster, drought, war, and internal strife as the Council of Ministers mandated use in different times since 2005.

In this context; between the years of 2005 and 2019, 324 thousand tons of flour equivalent to 432 thousand tons of wheat was provided by TMO to Pakistan, Palestine, Somalia, Yemen, and Syria.

In 2016, 2,000 tons of rice equivalent to 3.506 tons of paddy was provided to Palestine. As of 2019, a supply tender for grant flour of 22,000 tons equivalent to 31 thousand tons of wheat was made for Syria and flour grant to the country is going on.

PULSES: A SOURCE OF PROTEIN FOR 2 BILLION PEOPLE You said that you wanted to increase the consumption of pulses. Why do you want to do this? Pulses are a source of protein for more than two billion people. This is an important figure. This amounts to one quarter of the world’s population. That’s why pulses are important nutrition for countries that cannot have access to other protein sources.

In the context of nutritional value, it provides a protein equivalent to meat products. You can have 15-20 percent of your daily energy need from pulses.

In addition to this, pulses have critical importance for health. Experts recommend consuming pulses at least 2 times a week to combat obesity, diabetes, and some chronic diseases.

According to FAO data, pulses that are produced around 90-95 million tons in the world use less water, bind free nitrogen in the air to the soil which increases the efficiency of soil, mitigate the climate change by having less carbon footprint, and enables the sustainability of agriculture.

Pulses processing capacity of our country, which is the gene center of pulses, is very high. Our country has high production in terms of ecologic conditions and advanced technology and can cultivate pulses in every region because of the geographic condition. Following cereals, the field crops come in the second place in terms of cultivation area.

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