Turkey Sets 130% Grain Import Tariff Despite Soaring Domestic Food Price Inflation

Turkey set a 130% tariff on grain imports starting May 1 — up from zero — in a surprise move that comes as domestic food price inflation is running sky-high and prospects are poor for the country’s soon-to-be-harvested wheat crop. 

The Turkish government didn’t provide a reason for the import duty. The move comes after some European Union countries last week announced protectionist bans on relatively cheap grain imports from Ukraine, actions that were later reversed. Since last June, Ukraine has accounted for between 80% and 100% of Turkey’s monthly wheat imports, as seen in this Gro display.

Limiting imports through tariffs often aids domestic producers but can raise costs for consumers. Turks are scheduled to go to the polls on May 14 for general elections to elect a president and members of parliament. 

According to Gro's Agricultural Price Inflation Application, Turkey's food prices have jumped more than fourfold since the beginning of 2020, when global food prices began to accelerate. Import tariffs on commodities that are priced in US dollars tend to drive a country’s food price inflation higher when translated into the local currency.

In addition, the Turkish lira has dropped by 24% against the dollar in the past 12 months, as shown by Gro’s Currency Browser, exacerbating the inflationary impact of food imports. 

Turkey is one of the world's largest wheat flour producers and exporters. The country usually needs to import wheat to supplement domestic supplies in order to satisfy wheat millers’ demands. 

Wheat import needs might actually be higher than normal this year as Turkey’s domestic wheat crop suffers one of the worst droughts of the past 20 years, as shown by Gro’s Climate Risk Navigator for Agriculture. So far this year, accumulated precipitation in Turkey’s main wheat growing areas has been only about half the 10-year average. 

Comparable drought conditions in 2021 drove wheat production down by 14% versus the preceding five-year average.