Turkey is buying more wheat from other countries after restricting imports from its top supplier Russia as part of a food-trade dispute.
In the last two weeks, Turkish firms agreed to import as much as 300,000 metric tonnes of Baltic grain, and more cargoes are being lined up, according to Linas Agro. That’s more than Turkey normally buys from the region, the shipper said. Companies also booked shipments of Ukrainian and Hungarian wheat in recent weeks, S&P Global Platts said.
Turkey this month put restrictions on some Russian farm products amid a squabble stemming from the downing of a Russian fighter jet in 2015. As the world’s biggest exporter for flour, Turkey is a major buyer of high-quality wheat. Port data shows Turkey is already finding replacements to fill the gap in Russian supply, researcher AgResource Co said.
“I see the Baltic being close to sold out on high-protein wheat and there is hardly any left over for this season,” said Henrik Klindt Petersen, managing director of shipper Linas Agro in Denmark.
Private importers agreed to buy 200,000 to 300,000 tonnes of Baltic wheat for April and May shipment in the past few weeks, he said. Companies also booked 100,000 tonnes of Ukrainian and 20,000 tonnes of Hungarian supplies, said Andrei Agapi, a team leader for Europe and Black Sea grains at Platts. Ukraine sold just 27,000 tonnes to Turkey between July and February, UkrAgroConsult said.
Some millers who needed to replenish stocks have paid a premium of about $10 a tonne for Hungarian supplies, Agapi said.
Extra business between Turkey and Hungary may hurt future Russian exports even if relations improve, according to Agapi. That’s because Turkish firms will have more chance to test and adjust their milling machines to process Hungarian grain, which is typically different in quality to Russian supplies. Still, prices will remain the ultimate factor, he said.
Restrictions would have to be in place a while for Russia, which shipped 3mn tonnes to Turkey last season, to lose its ranking as the top supplier. But with Baltic countries and Ukraine already exhausting most of their higher quality grain, Turkey is facing fewer places to buy from in the coming months.
“High-protein grain will continue to be in stiff demand,” Linas Agro’s Petersen said. Once Baltic supplies are used up, Turkey “will have to search for other markets and pay the price, unless they can go down on their quality requirements,” he said.
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