Istanbul — Turkey's trade ministry said Thursday that due to recent fluctuations in domestic flour prices it has introduced a regulation limiting exports of flour produced from grain grown domestically, outside of the "Inward Processing Regime" (DIR) duty exemption mechanism, to 1% of total exports.
The ministry said the move was designed to stabilize domestic flour prices, protect consumers and prevent speculation, adding the limit was being imposed on a temporary basis and would be removed when domestic price stability returned.
In response to the measure, mills bought heavily from Russia Thursday.
Several CIF Marmara Russian 11.5% protein wheat trades took place at $206-$207/mt, a 12.5% trade went through at $220/mt and a 13.5% trade took place at $233/mt.
Given Turkey's status as the leading global flour exporter, the temporary regulation is likely to hurt Turkish exporters, who face prohibitive import costs due to the weakness of the Turkish lira.
Prior to the Lira plummeting against the dollar, around 10 coasters carrying wheat would travel from Russia on a daily basis. This figure is now closer to fewer than 10 a week.
To support struggling millers, TMO, the state grain agency, announced in early August it would open its 2 million mt wheat stocks at a subsidized cost, far ahead of time.
However, as much of the inventory is composed of domestic grain, exporting millers will be unable to benefit from the measure.
Market participants expect trade flows to increase in the coming weeks, but to gradually slow further into the year.
