Global Wheat Prices Decline, Yet Türkiye Faces High Stocks
While wheat prices worldwide dip below $200, Türkiye enters the 2024 season with high stocks. Favorable weather conditions are expected to result in a high yield, potentially leading to an oversupply, which could adversely affect prices.
Wheat Prices Dip Below $200 Due to High Stocks and Anticipated Production Increase
Described as the grain warehouse of the world, the Black Sea region has witnessed wheat prices drop below the $200 mark, driven by high stocks and anticipated production increases in the upcoming harvest season.
Concerns Arise Over Oversupply in Türkiye
Sector representatives attribute the anticipated price decline to high stocks in producer countries and the expected production increase in the upcoming harvest season. In Türkiye, favorable climate conditions, coupled with the Toprak Mahsulleri Ofisi’s (TMO) high stock transfer and production increase, are anticipated to lead to an oversupply, potentially triggering a new crisis.
Market Dynamics Drive Price Decline
The recent price decline is primarily attributed to high carryover stocks in both buyer and seller countries, as well as the anticipated high production yield with the upcoming harvest. Representatives anticipate that wheat prices in Türkiye will remain above global levels due to high input costs.
TMO’s Efforts to Manage High Stocks
TMO purchased wheat from producers at prices of 8,250 TL per ton for red and white hard bread wheat and 9,000 TL per ton for durum wheat in 2023, with an additional 1,000 TL support per ton. Despite efforts to reduce high stocks through international tenders, TMO rejected bids for 150,000 tons of durum wheat exports in March due to low price offers.
Anticipated Price Range for Wheat
With the upcoming harvest season, industry representatives expect wheat prices in Türkiye to range from a minimum of 11,500 TL to a maximum of 12,000 TL per ton, plus a 2 TL support premium. TMO’s management of surplus years remains crucial amid fluctuating market conditions.
Focus on Planned Production
Emphasis is placed on planned production to address concerns about the potential crisis caused by oversupply. While price declines are feared due to high production costs, sector representatives stress the importance of planned production for sustainable agricultural practices.
Post-Pandemic Demand Decline
Despite increased production, post-pandemic demand has not seen a significant surge in recent years. Major wheat-exporting countries, including Russia, France, Canada, Kazakhstan, the US, Ukraine, and Germany, have experienced surplus stocks, leading to continuous price declines.
Türkiye Expected to Maintain Above-Average Prices
Given Russia’s significant wheat production and export volumes, neighboring Türkiye is expected to maintain above-average prices despite global market trends. Climate conditions, especially rainfall in April and May, will be decisive factors in determining wheat prices in 2024.
Logistic Challenges Impacting Prices
In addition to anticipated high carryover stocks worldwide, logistical challenges, such as those in the Suez Canal, have diverted shipments to other destinations, resulting in lower prices. Price pressures are further exacerbated by geopolitical tensions and favorable weather forecasts until the harvest.
Stay informed as we monitor market developments and potential price fluctuations in the wheat industry.
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