The Turkish government announced last week that it will halt wheat imports from June 21 until at least October.

This decision has added pressure to the global wheat market, particularly affecting European wheat futures.

The purpose of the ban is to protect Turkey’s domestic wheat producers from declining global prices due to harvest pressure.

However, the ban could also have significant implications for the global market.

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Turkish Wheat Imports

Turkey is among the top five largest wheat importers in the world, importing an average of 10mt of wheat annually.

Russia and Ukraine are typically the largest suppliers of wheat to Turkey.

In the first seven months of the 2023/24 season, Turkey imported 6.45mt of wheat, with 5.33mt (83%) coming from Russia, and an additional 0.89 million tonnes (14%) from Ukraine.

Despite high bread consumption per capita in Turkey, this does not drive the pace of wheat imports.

Since May 2023, wheat imports have been subject to a prohibitive 130% tariff.

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However, if the imported wheat is processed into flour or pasta for export, the import tariff is reduced to zero.

Turkey is the world’s leading flour exporter and one of the largest pasta exporters.

Since 2018, only exports made from imported grain have been allowed.

However, it has now been announced that from June 21 to October 15, 2024, Turkey will allow exports of flour made from domestically grown wheat, under a license system.

Market Impact

In the first few months of 2024, increased competition from Russian wheat was a key factor in lowering wheat prices, along with selling by speculative traders. High Russian export availability, coupled with trade disruptions through the Suez Canal, resulted in more Black Sea grain seeking markets in key European export regions.

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Turkey’s halt on wheat imports could potentially lead to more Russian and Ukrainian wheat competing in traditional EU export markets, which is why the announcement has pressured prices. However, this impact depends on whether Turkish wheat product exports are maintained using domestic production and stock levels, or if there will be a displacement effect on demand.

Additionally, there is a caveat regarding the crop sizes in Russia and Ukraine. Smaller crops from these top producers could reduce the overall exportable supply and offset the impact of the Turkish ban. More information is available at the AHDB website.