Proceed or not proceed: Is that a question?

02 November 202310 min reading

You need to understand whether is it worth it or not, your government will support you or not, and ask yourself twice: Why is the raw material international ag commodities market a few times bigger in volumes than the by-products market?

Agricultural commodities processing is an essential aspect of the agricultural value chain. The process involves transforming raw agricultural products into value-added products that can be sold in external markets. The by-products of agricultural commodities processing are also important, as they can be used for various purposes, including animal feed, fuel, and fertilizers.

To access external markets with by-products, it is essential to understand the market demand and regulations. Market research can help identify potential buyers and their requirements, including quality standards and packaging. It is also important to ensure compliance with local and international regulations, including food safety and environmental standards.

One way to access external markets with by-products is through partnerships with established traders or distributors. These partnerships can provide access to new markets and help navigate regulatory requirements. It is also important to establish relationships with potential buyers through trade shows and other industry events.

Another approach is to explore value-added opportunities for by-products. For example, agricultural waste can be used to produce biofuels or bioplastics, which have a growing demand in many markets. By exploring these opportunities, agricultural producers can create additional revenue streams and reduce waste.

In addition to market access, it is important to consider the environmental and social impacts of agricultural commodities processing. Sustainable practices, such as reducing waste and using renewable energy sources, can help reduce environmental impacts and improve social outcomes.

Overall, accessing external markets with by-products requires a strategic approach that considers market demand, regulatory requirements, and sustainability considerations. By leveraging partnerships and exploring value-added opportunities, agricultural producers can create new revenue streams and contribute to sustainable development.

Countries are trying to develop deep grain processing because it can provide several benefits, including increased value-added products, job creation, and improved food security. Deep grain processing involves transforming raw grains into various products such as flour, starch, and ethanol.

But it’s not always easy to reach external markets. Countries try to protect their markets from externally produced products and proceed agricultural commodities by their own for several reasons. One reason is to support their domestic farmers and agricultural industries by providing them with a market for their products. This can help to ensure that the country has a stable supply of food and other agricultural products, which can be important for national security.

Another reason is to protect local industries from foreign competition. If a country allows too many imports of agricultural products, it can lead to a decline in local production and the loss of jobs. By protecting their markets, countries can maintain a level of control over their domestic industries and ensure that they are not negatively impacted by foreign competition.

Finally, some countries may also seek to protect their markets from external products due to concerns about food safety or environmental standards. By producing their own agricultural products, they can ensure that they meet their own standards and regulations, which may be more stringent than those in other countries.

Overall, countries may try to protect their markets from externally produced products and proceed agricultural commodities by their own for a variety of reasons related to national security, economic stability, and regulatory concerns. 

Here are some examples of how countries try to protect their markets from externally produced products and promote their own agricultural commodities:

1. Tariffs: Governments impose tariffs on imported goods to make them more expensive and less competitive with locally produced goods. For example, India imposes high tariffs on imported agricultural products like apples and almonds to protect its domestic farmers.

2. Subsidies: Governments provide subsidies to domestic producers to make their products more competitive with imports. For example, the European Union provides subsidies to its farmers to promote agricultural production and exports.

3. Quotas: Governments limit the amount of imports allowed into the country to protect domestic producers. For example, Japan restricts the amount of rice that can be imported into the country to protect its domestic rice farmers.

4. Non-tariff barriers: Governments impose non-tariff barriers such as sanitary and phytosanitary regulations, technical standards, and labeling requirements to make it difficult for foreign producers to enter the market. For example, China has strict regulations on food safety and labeling that make it difficult for foreign producers to sell their products in the country.

5. Export restrictions: Governments restrict the export of certain goods to ensure that they are available domestically at affordable prices. For example, India restricts the export of wheat and rice to ensure that there is enough supply for its domestic population.

Turkey did great job. Wheat milling is a significant industry in Turkey, with the country being one of the world’s top consumers of wheat. Turkey has a long history of wheat cultivation and milling, dating back to ancient times. Today, the country is home to many modern wheat mills that use advanced technology to produce high-quality flour.

Wheat is an essential crop in Turkey, with the country producing up to 20 million tons of wheat annually. The majority of this wheat is used for milling, with the flour produced being used for a wide range of products, including bread, pasta, and pastries. Wheat milling is a crucial industry in Turkey, providing employment for thousands of people and contributing significantly to the country’s economy.

The process of wheat milling involves several stages, starting with the cleaning and conditioning of the wheat. The wheat is then ground into flour using a series of rollers and sifters. The flour is then graded based on its quality, with higher-quality flour being used for premium products such as bread and pastry.

Turkey is home to many modern wheat mills that use advanced technology to produce high-quality flour. These mills are equipped with state-of-the-art machinery, including roller mills, sifters, and purifiers. The mills also use computerized systems to monitor and control the milling process, ensuring consistent quality and efficiency.

One of the most significant advantages of Turkish wheat milling is the quality of the wheat itself. Turkey uses some of the world’s finest wheat, with its wheat being renowned for its high protein content and excellent baking qualities, excellent gluten strength, making it ideal for producing high-quality bread and pastry.

Another advantage of Turkish wheat milling is the country’s strategic location. Turkey sits at the crossroads of Europe and Asia, making it an ideal location for exporting flour to both regions. The country has excellent transportation links, including ports, highways, and railways, allowing for efficient and cost-effective transportation of flour to customers around the world.

In conclusion, wheat milling is a crucial industry in Turkey, contributing significantly to the country’s economy and providing employment for thousands of people. With its high-quality wheat and advanced milling technology, Turkey is well-positioned to continue to be a leading producer of flour for many years to come. Turkey is expected to ship a record 5.4 million tonnes of flour (wheat equivalent) in the 2023-24 marketing year, according to the latest quarterly update from the International Grains Council (IGC). Perennially the world’s largest flour exporter, Turkey is expected to increase imports by 600,000 tonnes compared to 2022-23. Millers sell the flour to private bakeries that produce and sell bread at a set price. The price varies from region to region and is fixed by the local government. About 60% of the country’s flour is made with wheat sourced from TMO, the FAS said. 

Turkey has over 600 flour mills in 69 provinces with a production capacity of 30 million tonnes per year. Key regions for flour production include southeastern and central Anatolia. Nearly 15,000 people are employed at the flour mills, according to TUSAF.

Same great job Ukraine did in veg oils production. According to the State Statistics Service of Ukraine, the country produces over 6MMT of sunoil annually, making it one of the world’s largest producers. Ukraine is a significant exporter of vegetable oil, with exports reaching over 5.5 million tons pre-war.

Sunflower oil is the most commonly produced vegetable oil in Ukraine, accounting for over 80% of the country’s total vegetable oil production. The demand for Ukrainian vegetable oil has been increasing steadily over the years, with major export destinations including China, India, and the European Union. 

The growth of the Ukrainian vegetable oil industry can be attributed to several factors, including favorable climate conditions for sunflower cultivation, modern production technologies, and government support. The Ukrainian government has implemented various policies and programs to support the development of the agricultural sector, including the export duty for sunseeds. So these are great examples of how government and business can come together and reach great values. 

Developing deep grain processing can also create job opportunities. For example, in Nigeria, the government is promoting the development of cassava processing industries to create jobs for youth and reduce poverty. The cassava industry in Nigeria has the potential to create over 5 million jobs and generate $5 billion in annual revenue.

Deep grain processing can also improve food security by reducing post-harvest losses and increasing the availability of value-added products. For example, in Ethiopia, the government is promoting the development of teff processing industries to reduce post-harvest losses and increase the availability of teff-based products such as bread and porridge.

In conclusion, developing deep grain processing can provide several benefits, including increased value-added products, job creation, and improved food security. As global demand for processed grains continues to increase, countries should consider investing in deep grain processing to capitalize on these benefits.