Turkey has announced that it is extending its current zero import duty on sunflower seeds into the 2021/22 marketing season and canceling a previous plan to raise the sunflower oil import levy from 10% to 36% on July 1.
Rising import costs, the lira’s depreciation against the dollar, and higher prices in the global market have been pushing up local food prices in Turkey. Sunflower oil is the most consumed vegetable oil in Turkey.
Year-over-year, the Gro Turkey Food Price Index has risen 15%.
Turkey’s effort to protect its local food prices and supply comes on the heels of Russia and Ukraine’s efforts to cool their own domestic food inflation.
To combat rising food inflation, Russia, the world’s second largest sunflower producer, in mid-April announced plans to hike its export tax on sunflower seeds. A few weeks later, Ukraine followed suit with a measure aimed at controlling domestic prices by restricting sunflower oil exports.
Because of the overall tightness in vegetable oil supplies and a rebound in demand, vegetable oils are emerging as a key driver of global food inflation this year. Concurrently, governments worldwide are under pressure to combat food inflation linked to soaring grain prices.
Turkey, the world’s largest importer of sunflower seeds, relies heavily on Eastern Europe for its supply. Ukraine, the worlds’ largest producer of sunflower seeds and sunflower oil, experienced a poorer than usual 2020/21 crop, due to dry conditions in the Kirovohrad, Kharkiv, and Dnipropetrovsk regions, as seen in the Gro Drought Index. These supply constraints have added to price volatility.
Gro has created a series of real-time food inflation indices for major countries, including the US, China, India, Brazil, Canada, and Turkey. Turkey’s latest announcement indicates inflationary pressures are still strong around the world.
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