Parallel to the population increase, world wheat production increased by 3.5% in the last 5 years and reached 709 million tons in the 2013/2014 period. In the same period, there was an 8% increase in wheat consumption, and wheat consumption in the 2013/2014 period was 697 million tons. About 20% of the wheat produced has been subject to foreign trade. World wheat stocks increased by 7% in the analyzed period and reached 185 million tons. While a decrease is expected in world wheat production, consumption and trade during the Tenth Development Plan period, no change is foreseen in stocks.
The important wheat producing countries of the world and the change in their production amounts by years are given below. EU ranks first in world wheat production in 2013/2014 season with a production amount of 143.1 million tons.
EU is followed by China, India and the United States of America (USA) in wheat production.
An increase is expected in the wheat production of the world's major wheat producing countries in the period of 2014-2018. Similarly, increases are expected in Turkey's wheat production, taking into account the increase in yield. When the subject is analyzed in terms of wheat exports, it is seen that most of the world wheat needs are met by China, India and the USA in the 2013/2014 production year.
When Turkey is accepted as the only EU country, it ranks 10th in the world in wheat production. The change in Turkey's wheat production differs from the change in world wheat production. Turkey imports between 2.5 and 4.7 million tons of wheat every year within the scope of “Inward Processing Regime2” in order to increase its flour export.
There has been an increase in wheat consumption in the world in recent years. In countries with a large population, wheat consumption is high. With its large population, China ranks first in world wheat consumption. Turkey is more stable in wheat consumption compared to other countries.
While the total wheat consumption figures of the countries increase in parallel with their populations, they also change depending on factors such as the development level of the countries and culture. Annual per capita consumption figures of some countries; It is 94 kg in the USA, 119 kg in the EU, 69 kg in India and 76 kg in China. In Turkey, the average annual wheat consumption per capita is 250 kg .
The highest wheat yield in the world is in EU countries. The average yield of wheat per hectare in the EU was 5.30 tons in 2014.
This value is about twice the world average. In terms of productivity, the EU is followed by important producing countries such as China, Canada and the USA. The average wheat yield of Turkey is 2.67 tons per hectare. With this average, Turkey has a yield below 3.12 tons per hectare, which is the world wheat yield average. In parallel with the technical developments in Turkey, very small increases in wheat yield are expected in the next 5 years.
The problem of excessive variety in wheat is frequently mentioned by commodity exchanges, licensed warehouses and traders . As a reason for this; The difficulties encountered in classification and storage are presented. However, as in our country, all over the world; Varieties development studies continue increasingly in terms of yield, quality and tolerance to environmental stresses, and new varieties are registered. Variety development is necessary in connection with the solution of emerging problems and climate change. In the direction of solving this conflicting problem;
- The search for a solution to emerging problems and less affected by climate change, high quality-yielding, stress-tolerant varieties and breeding studies should be continued.
- In our country, cultivar names are emphasized a lot, and quality classes and specs should be emphasized instead.
- The classification and storage problem caused by too many varieties; what each different ecology will do; As in similar examples in the world, the solution of creating product groups that will consist of a mixture of different varieties in different proportions and that will be named with a name should be emphasized. Universities, related institutions of the Ministry of Agriculture and Forestry, especially TMO, commodity exchanges and related institutions and organizations should play an active role in this regard.
The topic of local wheat comes to the fore frequently and often outside of its original medium. Since our country is the gene center of wheat; It contains genotypes of all types, from wild to cultured forms, from diploid to tetraploid and hexaploid.
- As in all types; Improvement studies should also be continued in spelled wheat species such as einkorn and gernik, which are mostly meant as local wheat.
- Nutritional values and technological properties of spelled wheat (einkorn and gernic) should be revealed and registration procedures should be established.
- Certified seed production and production should be done in line with the needs.
- Processing facilities should be emphasized in line with processing technologies.
- Considering the low unit area yields of these species, imaginative approaches such as closing and planting all wheat planting areas should be abandoned.
- The primacy of bread and durum wheat production should not be overlooked in our country as well as in the rest of the world.
Today, 700 flour factories are actively working in Turkey.
The actual flour production capacity of these factories is approximately 12 million tons per year. However, the capacity utilization rate is quite low (55%). Turkey's capacity utilization rate is lower than the world average of 65%. Flour companies operating in Turkey have chosen their establishment locations based on proximity to raw materials, market and infrastructure.
Businesses purchase wheat monthly. Some businesses prefer to purchase wheat intensively during the harvest period. Wheat is bought intensively under free market conditions. However, depending on the cyclical movements in the market, wheat is also purchased from TMO. In addition, large-capacity flour enterprises procure wheat through imports in order to be able to work throughout the year and to buy higher quality wheat at a cheaper price. Although the production of wheat flour in the Turkish flour industry is generally for bread; Due to the developments in the consumption of bakery products: special purpose flours such as starch, biscuit, pita flour, bagel flour, cake flour are also produced.
At the beginning of the nineteenth century, 2.5 million tons of wheat was produced on 2.8 million hectares of land in Turkey, while today, 22 million tons of wheat is produced on 8 million hectares of land. In the said period, wheat productivity increased from approximately 1 ton per hectare to 2.82 tons. While the increase in wheat production was achieved with the increase in the cultivated area until the 1990s, today's increase is due to the increase in productivity.
Annual wheat production and existing stocks in Turkey are at a level to meet domestic consumption. However, due to seasonal fluctuations and the shortage in quality wheat supply, wheat, which is the raw material of flour, is imported. A continuous increase has been observed in Turkey's flour export in recent years. Positive developments in flour export also increased quality wheat imports.
Turkey is the most important flour exporter in the world as of the year 2000 and thirteen. Turkey realizes 18% of world flour export.
Kazakhstan, which exports 1.8 million tons of flour, follows Turkey. It is estimated that Turkey's wheat flour export will increase in the coming years. Apart from these two countries, the most important flour exporting countries are Germany , Pakistan and France .
World wheat flour prices are not very stable. Increases and decreases in wheat production are the main reason for this instability. The price of wheat flour in the world markets is 461 $/ton as of 2013 . The price of wheat flour in the world markets was 438 dollars between 2014 and 2018. When the price of wheat flour is analyzed on the basis of countries, the flour export price of Turkey, which is the leading country in flour export, is 442 dollars per ton. Between 2014 and 2018, the average price of wheat flour was 425 dollars per ton. While Turkey's flour export price is below the world average, the unit prices of flour exporting European countries are above the world average.
When we look at Turkey's export markets, it is seen that the Middle East , Far East Asian and African countries are in the first place. Since the year 2000, Iraq has been Turkey's most important flour export market. Turkey realizes about half of its total flour export value to Iraq . Despite the global crisis, there was no decrease in Turkey's flour export.
The top 5 countries to which Turkey exports flour are listed in the table below on the basis of quantity. Iraq ranks first not only in terms of value but also in terms of quantity. Iraq is followed by Syria and the Philippines. At the end of 2018, Turkey increased its flour export to the world by 40% compared to 2013. In the following periods, our effectiveness is expected to continue in the countries to which we export wheat flour.
Kazakhstan, which is the most important rival of Turkey in the world flour markets, has more population density and close neighbors such as Uzbekistan, Tajikistan, Afghanistan, Turkmenistan, etc. It is seen that it exports flour to countries such as The reason why Kazakhstan has a narrow hinterland in terms of market is due to its geopolitical position and the quality of the flour it produces. In the coming years, an increase is expected in the amount of flour export that Kazakhstan will make to its immediate surroundings.
Although Kazakhstan has surpassed Turkey in terms of the amount of flour exported in some periods, Turkey has always been ahead of Kazakhstan in terms of export value. In 2012, Kazakhstan achieved an income of 606 million dollars with 2.2 million tons of exports; Turkey earned 841 million dollars with 1.9 million tons of exports. It can be said that this is due to the fact that Turkey's flour quality is better than Kazakhstan.
According to the TFIF 2013 sector report, the majority of the 700 active flour mills in Turkey are in the Central Anatolia Region, which is the wheat production area.
It can be stated that this region is close to the market and it is a region that is prone to establishment in terms of flour industry. In terms of the number of flour factories, the Central Anatolia Region is followed by the Black Sea and Marmara regions, respectively.
The Turkish flour industry has an annual flour production capacity of approximately 22 million tons. However, Turkey's actual flour production capacity is around 12 million tons.
This is due to the low capacity utilization rate. The regional distribution of Turkey's flour production capacity is generally in parallel with the regional distribution of the number of enterprises. The most obvious difference between them is that the capacity of the factories in the Southeastern Anatolia Region ranks third. As the reason for this situation, it can be stated that most of the flour exports to the Middle East and North Africa are made from this region. The fact that the Southeastern Anatolia Region is the gateway to the Middle East has paved the way for the establishment of large-capacity flour factories here.
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In order for businesses operating in the flour sector to continue their activities economically and to maintain their competitiveness, they have to take into account the risks posed by market conditions. Businesses operating in the flour sector are faced with collection risk, stock risk, legal risks and technology risk.
Due to the intense competition brought about by the idle capacity, the flour industrialist has to sell goods to its customers on open accounts and without collateral. This, in turn, causes disruptions in the collections of the sector and carries high risks. The receivable risks of the sector differ considerably from the receivable risks faced by banks.
The second risk group faced by businesses operating in the flour sector is stock risk . In order to ensure production continuity and quality stability, businesses have to keep their raw materials in stock for a few months. Firms are faced with risks arising from storage conditions while preserving these stocks. These risks are pests in the warehouse, escalation in the warehouse, factors such as flooding and flooding that may come to the warehouse from outside.
In case of realization of the specified risks, companies are subject to warehouse waste. The fluctuations that may occur in the wheat price after the enterprises take the wheat, which is the raw material, into their stocks are in this risk group. Since the amount of wheat in stock is generally higher than the orders in hand, a decrease in the price of wheat may cause loss from stocks.
Legal risks are another risk faced by businesses operating in the flour sector. Since Flour Industry enterprises are production facilities, they are in contact with many ministries, public institutions and organizations and are subject to the regulations and regulations of these institutions. Flour businesses are faced with many penalties and enforcement risks that may arise from these laws, regulations and rules. Flour factories continue their activities in an intensely competitive environment and work with very low profit margins. For this reason, they have difficulty in following technological innovations and cannot allocate a budget for R&D. This may lead to a decrease in the productivity of enterprises in the long run. This risk is known as technology risk .
Turkey is in the position of the most important flour exporter in the world with its constantly increasing exports of finished products in recent years.
Turkey ranked first in flour export both in terms of quantity and value in 2013. In 2013, Turkey's flour export amount is approximately 2.1 million tons and the flour export value is 946 million dollars.
Turkey exports flour to many countries of the world. While Middle Eastern countries were dominant among these countries in the past years; In recent years, flour exports have been made to African countries. In addition, Turkey's flour export to the Far East market is in question.
The countries that Kazakhstan, the biggest rival of Turkey in flour export, export flour are seen. As can be seen in the figure, Kazakhstan has a more local market and exports to neighboring countries. The geographical location of Kazakhstan, whose market is limited to its neighbors, creates both a disadvantage and an advantage. The biggest advantage of its geographical location is the presence of population-rich countries such as China and Russia around it. The most important disadvantage is the transportation facilities for export.
The change in the share of flour in wheat flour export and total export of agricultural products over time indicates that the comparative competitiveness of the Turkish flour industry has increased.
The Balassa indices (Revealed Comparative Advantage Index - RCA= Revealed Comparative Advantage Index) calculated to reveal Turkey's competitiveness and the change (RCAV) values in these indices, the comparative competitiveness of the Turkish flour industry against both the world and the EU in the current situation. demonstrated its superiority. It is estimated that the market share of the Turkish flour industry will increase rapidly in the near future against the world and the EU, but more slowly in the following years.
Iraq is the country where Turkey realizes most of its flour export.
Turkey is the biggest actor in the Iraqi flour market. Turkey has increased its export income by 67% in the Iraqi market in the last 5 years. The competitor countries in the Iraqi market are far behind Turkey and the export revenues of these countries have decreased significantly in the last 5 years. During the Tenth Development Plan period, it is estimated that Turkey's export revenue from the Iraqi market will be $565 million on average.
In the last 5 years, the amount of flour export of Turkey to Iraq has increased by 22%. The flour export of the countries operating in the Iraqi market tends to decrease in these 5 years. Turkey's export income from the Iraqi market has increased more than the amount of flour it exports.
One of the markets in which Turkey has been active in recent years is the Philippines , which is located in the Far East market. Turkey has increased its flour export income in the Philippines by 178% in the last 5 years. Turkey has become a serious competitor to countries such as China, Indonesia and Australia, which previously dominated this market.
Although Vietnam has increased its income from flour exports to the Philippines by 400% in the last 5 years, it is far behind Turkey in terms of value. In the last 5 years, the amount of flour export of Turkey to the Philippines has increased by 112% . There is an almost linear relationship between the increase in flour export amount and the increase in income. Australia, one of the flour exporting countries to the Philippines, has experienced serious income losses in the last 5 years.
Angola is one of the markets where Turkey has been active in Africa in recent years. Turkey is the second most important flour exporter in Angola after France, which is the largest exporter country. Turkey has increased its revenue in the Angola market by 377% in the last 5 years. Turkey's income growth rate in this market in the last 5 years is higher than the increase in exports. Turkey with its activity in Angola in recent years; It surpassed European countries such as the Netherlands , Germany and Belgium .
In recent years, Indonesia is the only country that has narrowed its market share among the countries where Turkey has been active in flour export.
Indonesia's total flour export has decreased by 56% in the last year compared to 2012. Flour export amount and income of Turkey to Indonesia decreased by 84% . India is Turkey's most serious competitor after Sri Lanka in the last year.
Guinea is one of the markets where Turkey has shown the greatest improvement in flour exports in recent years. In the last 5 years, Turkey's flour export to Guinea has increased by 39% and its income by 44,000 % . The only country that is above Turkey in the Guinea market is Morocco. Turkey has reduced the effectiveness of EU countries such as Belgium, Netherlands and France in this market.
As a result; It has been shown that the Turkish flour industry has a competitive advantage in the world wheat flour market in terms of both cost and trade indicators and that it will maintain this superiority in the next 5 years.
Turkey is the world's leading country in flour export. The most important rival of Turkey in flour export is Kazakhstan . However, Turkey does not have a market-based competition with Kazakhstan. Turkey has reached almost every part of the world in flour export, except for South American countries. Although Turkey is a net flour exporter, it is a wheat importer country. The most important reasons for this are; The reason is that the farmer abandons wheat production due to the high domestic consumption, the low quality of the wheat produced and the agricultural policies applied. In addition, Turkey's wheat yield is below the world average. The reasons for the low yield in a country that is the homeland of wheat are wide enough to be the subject of a research.
Flour industry enterprises in Turkey are generally close to wheat production areas. This closeness is directly proportional to the low profit margins of both wheat and flour. The capacity utilization rate of the flour industry in Turkey is below the world average. The most important reason for this is that there are too many companies in the flour industry and most of these companies are small-scale enterprises. And this prevents Turkey from reaching more gains in world flour export. Flour prices in the world and in Turkey vary depending on the wheat supply. However, Turkey's flour prices were below the world average in every period.
By reducing the idle capacity of the Turkish flour industry, it can be ensured that the competitive power is increased even more. Turkey is a medium-sized flour producer country, and the capacity utilization rate in wheat flour production is quite low. Although the export figures are good worldwide, they are far below the current capacity. In order to increase the capacity utilization rate, enterprises that currently export should be supported, and measures to encourage exports should be taken in non-exporting enterprises. Establishing institutional capacity through trainings to be organized for the said enterprises, and increasing the experience in export procedures will contribute to the increase in exports and thus the decrease in the capacity utilization rate. Simultaneously, it may be beneficial to provide the financing that businesses will need under appropriate conditions. Flour industrialists who are currently exporting should also be supported politically in foreign markets and special support should be given in terms of quality increases and branding.
The countries where Kazakhstan sells flour are the major flour consumer countries in the world. Market researches should be carried out in order to remove the said markets from being the local market of Kazakhstan and access to these markets should be ensured. Turkey's proximity to the region and its historical ties should be used for this purpose. In order to increase the competitiveness of the Turkish flour industry, small and medium-sized enterprises in the sector should grow through mergers and adapt to technological developments and open up to the foreign market and their idle capacities should be eliminated.
It is necessary to reduce wheat imports by promoting quality wheat production in Turkey. For this reason, policies and strategies should be developed in order to produce wheat, which is the raw material of flour, with high quality and high efficiency. It is necessary to facilitate the supply of improved seeds with high yield and quality to the farmers and to establish facilities within the scope of possibilities in countries where wheat is produced intensively and close to the flour market. When necessary, the state should provide incentives to these investors. This will further increase Turkey's market share and pave the way for Turkey to be the only one in the sector in which it is the leader.
Sources
Serkan SEZEN