■ 1. Logistics facilities
■ 2. Entrepreneurship and institutionalization
■ 3. Financing facilities and banking sector compliance
■ 4. Availability of raw materials in appropriate conditions
■ 5 . Ports suitable for trade and their management
■ 6. The level reached in the milling machinery industry
■ 7. Geopolitical advantages in transportation
■ 8. Public sector supports
■ 9. Benefits of idle capacity
■ 10. Storage capacity increases
■ 11. Market research and segmentation
■ 12. Professional organization
■ 13. Competition conditions and profit margin
■ 14. Advertising and promotion expenses
■ 15. Compliance with international organization tenders
■ 16. Turkish Airlines(THY)
■ In the agriculture and food sector, we do not have many products that provide an export income of more than 1 billion dollars. In order to create added value, our production pattern is not rich. The expression Turkey is an agricultural country, which is taught in textbooks, is no longer a correct statement. When the climate crisis, pandemic, Ukraine-Russia war and earthquake disaster are added to the wrong practices in policies, a very serious transformation of agricultural and food policies and the implementation of structural measures need to be restructured immediately.
■ Whenever the expression increase in export is used, it is said that the grain is imported and the export is not important. From this point of view, let's take a look at the radical transformation in grain production in Russia in 24 years and learn a lesson.
■ 24 years ago, in September 1999, Russia harvested 60 million tons of grain, up from the previous year's disastrous 47.8 million. The United States shipped $1 billion of U.S. corn, wheat, rice, pork, beef and dry milk to Russia under a food aid agreement.
■ On the contrary, in a total of two decades, grain production in Russia was estimated at 146.27 million M/T in the 2022/2023 crop year. This represents an increase of roughly 29 million M/T over the previous agricultural year.
■ Today, the Russian Federation is the world's grain export leader with a grain export capacity of 55 M/T.
■ While wheat production in Turkey was 18 M/T in 1999, it is expected to be 19 M/T in 2023. While the population was 63 million in 1999, it is 84 million today, excluding tourists and immigrants. In Russia, the population remained unchanged at 144 million between the same years
■ Although Russia, Ukraine and Kazakhstan are the granaries of the Black Sea Region, why could they not surpass Turkey in flour export in the last 10 years? Even if the sum of EU-27 countries was in a structure that could compete with Turkey between 2010-2012, why did it decline in the export markets and fell below 1 M/T? Kazakhstan, on the other hand, remained Turkey's rival between 2010 and 2012 with an export capacity of 2 M/T. On the other hand, considering the range of countries that Turkey can make to 166 countries, Kazakhstan is far from a competitor that can be compared since it mostly trades with 4-5 countries.
■ Kazakhstan's wheat production is forecast at 16.4 million tons in 2022/23, its largest crop since the 22.7-million-ton record in 2011/12. With ample supplies, Kazakhstan's wheat exports are forecast to reach 10.5 million tons, up 2.0 million from the previous year. Kazakhstan is a major supplier of both wheat grain and flour to Central Asia, capturing nearly 100 percent market share in Uzbekistan, Tajikistan, and Turkmenistan.
■ By using the existing capacities and advantages of Russia and Ukraine, the battles for market grabs in flour export have lost their importance over time. Ukraine reached the maximum levels with 380 thousand tons and Russia with 250 thousand tons and Turkey's leadership had to be accepted, with levels reaching 3.5 M/T. It is obvious that Turkey, which makes ¼ of the world trade reaching 12 M/T with 50% capacity, will feed the World with its 33-35 M/T annual total capacity. In this context, the most rational policy should be to protect the benefits of being the grain and flour warehouse of the world in cooperation with these countries instead of competing with Turkey.
■ In the process of establishing the grain corridor, which came into force with Turkey's diplomatic efforts, we made intensive contact with the ships waiting at the ports, the type and quantity of the traded goods and the sector stakeholders, both Ukrainian and Russian professional organizations, traders and buyer countries. provided. As a result of the information conveyed in lists, agreements were signed and the process started.
■ Here again, alternative policies have been produced by us and shared with the public, in response to Russia's hesitations to send tradable products to developed countries rather than to countries in need. The most important of these was the first Russian Grain Exporters Union and the Russian Commercial Consultancy, as SMS. We have been informed that this proposal will be appropriate and will be forwarded to the relevant ministries. Suggestion; Using the 8.5 million tons of warehouse capacity in Turkey, the grains to be delivered from Russia to be delivered to the countries in need are for export by grinding using the idle capacities of the flour industry. We are happy to see that this proposal was transferred to the Turkish side after the approval of the ministries and turned into a common policy set.
■ All of the elements I listed above as 16 items are very important on their own. The importance of this success of Turkey has been achieved despite some external difficulties.
1. Trying to prevent trade in some countries with the initiatives of the countries that dominate the world markets in the grain market before the World Trade Organization.
2. Turkish milling machinery industrialists to establish turnkey factories in Turkey's flour export markets.
3. The effects of volatilities in the Turkish economy and financial markets on the Internal Processing Regime (DIR) system and creating uncertainty in foreign trade.
■ Although the criticism that the export made with imported wheat does not create added value and is not important by not accepting this success, the benefits of the sector cannot be denied with its employment of up to 50,000 in flour and bakery products. Of course, it is clear that the success of Russia in the last 24 years is more valuable in our country and the net export income that will arise from the grinding of domestic grain.
■ In the foreign trade, which will be examined in detail below, in 2016, an income of 1.095 million dollars was obtained in return for 3,573 million tons of exports, and 983 million dollars were obtained from the flour export, which was 3,070 million tons in the amount due to the effects of the pandemic.
■ After the serious decreases in unit prices in 2020, the supply problems and logistics bottleneck after the Ukraine-Russia war, which started on February 24, 2021, increased the general level of prices of goods prices in the world and in Turkey.
■These effects became more pronounced in 2022 and reached 1.547 million dollars with a record increase in value. This value is a record. In return, 3,164 million tons of flour have been exported.
■ While Iraq, Syria, Yemen, Somalia, Angola, Palestine, Benin Djibouti, Kenya, Ghana, Tanzania, and S. Leone maintain their long-term market shares in total exports, Venezuela, Sri Lanka and Cuba have drawn attention as important countries in the top 15 in recent years.
■ While Iraq's long-term rate is around 40%, other countries have had a 10-15% export share, especially Syria and Yemen, and other countries have a 2-5% export share over the years, depending on their importance.
■ In the last 10 years, the export amount has been over 3 million tons at all times, except for the years 2013-2015, while an income of over 1 billion has been achieved in other years, excluding the pandemic period. As we mentioned above, due to the increase in unit prices and the improvement of logistics problems, the revenue reached the level of 1.547 million dollars.
■ The development of export markets in Angola, Ghana, Djibouti and Benin, which are located in the African continent, was realized due to the market research carried out by professional organizations and the industry at that time.
■ In this context, the cooperative efforts of the commercial consultancy of the public sector also played an important role. While exports of both Kazakhstan and EU 25 countries were close to the 2 million tons and 1 million tons limits, respectively between 2010 and 2013, Turkey remained alone in the leadership by making 1/3 of the world's flour trade, which totaled 11-12 million tons.
■ In the following years, Kazakhstan experienced decreases in its exports due to the decrease in the share of Uzbekistan in border trade, while EU25 countries lost their African export markets to Turkey.
■ Pasta export has gained serious momentum in the last 10 years, similar to flour export. Global markets are more permanent and reliable than flour exports. In addition, as in flour export, it is not only a market like Iraq but it is in a structure that spans 3 continents.
■ In addition, these markets include densely populated and developed market structures such as China, Japan and the USA. Venezuela, Japan, Ukraine, Senegal, USA, Syria, Lebanon, Israel and China are noteworthy among the countries that made a leap in 2022. With this structure, the pasta industry has approached the psychological limit of 1 billion dollars.
■ Market research work for flour industry companies is carried out professionally by the firm "Sustainable Milling Solutions" (SMS). Please contact info@turkishflour.org for your requests and our offer.
Source: Email/GFMM
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