Turkey’s grain and feed market in Marketing Year (MY) 2024/25 is facing significant adjustments due to drier-than-normal weather conditions, shifts in government policies, and evolving trade patterns. Wheat, barley, and corn production are expected to contract, while Turkey’s continues to manage large carryover stocks from the previous year. The government is taking measures to reduce excess inventories, stabilize domestic prices, and conserve water resources through a new crop incentive program.
This analysis covers Turkey’s production outlook, consumption trends, trade shifts, and policy measures, along with their implications for domestic and international grain markets.
Production Trends
1. Wheat Production: Lower Yields Due to Drought Conditions
- Forecasted at 19.0 million metric tons (MMT), down by 2.0 MMT from last year due to yield losses.
- Limited rainfall from October-December 2024 caused 16% less precipitation compared to historical averages.
- Winter wheat planting and spring rains will be critical to determining the MY 2025/26 yield outlook.
- Government Response:
- New Agricultural Production Planning Model launched to encourage farmers to grow less water-intensive crops in drought-prone regions.
2. Barley Production: Declining Yields and Water Scarcity Concerns
- Forecast remains at 7.0 MMT, down 1.0 MMT from last year due to drought-related yield losses.
- Winter barley planting was completed in November, with concerns about drought risks for the spring 2025 harvest.
- Stocks are expected to decline, with the government selling off barley reserves to the domestic market.
3. Corn Production: Slight Increase but Overall Decline from Previous Year
- Corn production is forecast at 7.1 MMT, slightly revised upward due to a larger-than-expected second crop in southeastern Türkiye.
- Overall production remains lower year-over-year due to dry weather conditions.
- The government is closely monitoring corn prices and trade policies to stabilize the market.
4. Rice Production: Growth Despite Weather Challenges
- Forecasted at 580,000 MT (milled), up slightly year-over-year due to a marginal increase in harvested area.
- Less impacted by drought conditions due to access to irrigation in key regions like Thrace.
- Spring water levels will determine planting decisions for the next crop cycle.
Consumption and Demand Dynamics
1. Wheat Consumption: Increased Demand for Feed Wheat
- MY 2024/25 wheat consumption is projected at 20.0 MMT, slightly higher than previous estimates.
- Key factor: Surplus wheat stocks stored in underground bunkers have deteriorated in quality, leading to more wheat being used as animal feed.
- 90% of wheat consumption remains for food purposes, while feed wheat usage is rising.
- Government Policy: The Turkish Grain Board (TMO) is selling milling wheat at a discount ($250–$317/MT) to reduce stockpiles.
2. Barley Consumption: Strong Domestic Demand
- MY 2024/25 barley consumption remains at 8.0 MMT, driven by the demand for animal feed.
- TMO is selling barley reserves to the local market at $228–$245/MT to stabilize domestic prices.
3. Corn Consumption: Declining Due to Feed Substitution
- MY 2024/25 corn consumption is forecast at 8.9 MMT, lower than last year.
- Reason: More competitively priced feed wheat is substituting corn in animal feed formulations.
4. Rice Consumption: Stable Demand Despite High Inflation
- MY 2024/25 rice consumption is expected to remain at 810,000 MT, matching the previous two years.
- Inflation and high-interest rates are causing local traders to be reluctant to purchase rice stocks, leading TMO to step in as a major buyer.
Trade and Market Developments
1. Wheat Imports: Decline Due to Government Trade Restrictions
- MY 2024/25 wheat imports are projected at 5.5 MMT, down 40% year-over-year.
- Reason: The Turkish government suspended the Inward Processing Regime (IPR) for wheat from June to mid-October 2024, restricting imports.
- Russia remains Türkiye’s largest wheat supplier, despite trade disruptions.
- Current Import Policy:
- Millers must purchase 75% of their wheat from domestic sources.
- Only 25% of wheat can be imported under the IPR program.
2. Wheat Exports: Reduced Market Share in Africa and the Middle East
- MY 2024/25 wheat exports are forecast at 7.0 MMT, down from 9.95 MMT last year.
- Flour exports dropped by 40% due to policy changes, affecting shipments to Iraq, Syria, and Somalia.
- Hopes for export recovery are tied to new opportunities in Syria following its recent regime change.
3. Barley Trade: Surge in Exports to Liquidate Excess Stocks
- MY 2024/25 barley exports are expected to rise significantly to 450,000 MT, compared to 77,000 MT last year.
- Government auctions have helped move surplus stocks, with Iraq as the primary export destination.
4. Corn Imports and Exports: Stabilizing Market
- Corn imports are projected at 2.4 MMT, with Ukraine (735,000 MT) and Russia (185,000 MT) as major suppliers.
- Export volumes are forecast at 600,000 MT, largely consisting of transshipments to neighboring countries.
Conclusion
Turkey’s grain and feed market in MY 2024/25 is navigating weather-related production losses, shifting government policies, and evolving trade patterns. While wheat, barley, and corn production face declines, large carryover stocks are helping to stabilize domestic supply.
However, tightened import policies, shifting demand in the feed market, and competitive pressures on Turkish grain exports will continue to shape the industry. The next few months will be crucial, with spring rainfall, global market trends, and further government interventions determining the long-term outlook.
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