Required Report - public distribution

**Date:** 6/29/2004

**GAIN Report Number:** TU4021

TU4021

**Turkey**

**Grain and Feed**

**Barley Update**

**2004**

**Approved by:**

![](media/image1.wmf)Jim Higgiston, Agricultural Counselor

U.S. Embassy

**Prepared by:**

Unal Sarigedik, Agricultural Specialist

**Report Highlights:**

Turkey\'s barley production is estimated currently at 7.1 MMT, a slight
increase over 2003. Yields were good in most parts of Turkey, except the
Southeast Anatolia Region. After exporting large quantities in the past,
Turkey imported about 290,000 MT of barley in MY 2003. Although
production is expected to be good in MY 2004, The Turkish Grain Board
may need to import some barely to regulate the market since it will not
be able to procure any domestically due to high prices.

Includes PSD Changes: Yes

Includes Trade Matrix: No

Unscheduled Report

Ankara \[TU1\]

\[TU\]

**Barley Area**

Barley area increased slightly in MY 2004, primarily in the Southeast
Anatolia, as a result of a switch from durum wheat into barley. Good
prices in the market in MY 2003 precipitated the change.

# Production 

MY 2004 production is now projected at 7.1 MMT, which is slightly higher
than the earlier estimates. Barley is grown throughout the country
however Central Anatolia (especially Konya, Ankara, Eskisehir, and
Kirsehir Provinces) and Southeast Anatolia (especially Sanliurfa,
Diyarbakir, and Mardin Provinces) are the two major barley-growing
regions.

Thrace, Central Anatolia, and Aegean Regions are projected to have good
yields while yields in Southeast Anatolia were lower than expected.
Weather conditions in Thrace favored production while hot weather in
Southeast Anatolia limited yields.

# Consumption

Barley consumption increased in MY 2003 due to greater demand in the
livestock sector and expansion of Turkey's domestic feed industry. Fewer
cattle were slaughtered during the traditional holidays this year
compared to recent years and, as a result, demand for bovine feed was
larger than expected earlier. The output in the feed sector also
increased by about 15 percent this year that also raised the demand for
feed. Although production remained steady in MY 2003, increased demand
along with speculative trading put upward pressure on barley prices. The
Turkish Grain Board (TMO) normally stores barley in order to control
prices. If prices increase, TMO would release barley onto the market in
order to decrease prices. Unfortunately, TMO did not have sufficient
stocks to release barley in the market to depress prices.

Turkish poultry production has increased by 200 TMT from MY 2002 to MY
2004. Since the beginning of CY 2004, the GOT imposed an 80 percent duty
on corn imports. This has increased corn prices, but also exhibited
upward pressure on barley prices. The recent announcement of corn quotas
has done nothing to alleviate this price rise.

# Trade

In the past, TMO used to export large quantities of barley. Instead, in
order to combat high prices for barley, TMO had to import barley in
2003. TMO imported close to 215 TMT of barley in MY 2003. These imports
were primarily from the Black Sea Region, about half from Ukraine and
the rest from Russia and Kazakhstan. Additionally, brewing companies
imported about 75,000 MT of malting barley. TMO is not expected to
import large quantities in MY 2004.

# Barley Prices

Barley prices are currently are around TL 320,000 per kilogram (or about
USD 215 per MT). Prices are expected to decrease somewhat (about TL
300,000 per kilogram or USD 200 per MT) after the harvest starts in the
Central Anatolia Region but are expected to increase again (to about TL
340,000 per kilogram or USD 225 per MT with the current exchange rate)
in September or shortly after, when the entire harvest is completed. In
MY 2004, TMO will not procure any domestic barley because the market
prices are already high. As a result, TMO will again not be in a
position to regulate the market. If prices go very high, then, TMO will
need to import barley.

+----------+-------+--------+-------+--------+--------+--------+------+
| Turkey   |       |        |       |        |        |        |      |
|          |       |        |       |        |        |        |      |
| Barley   |       |        |       |        |        |        |      |
+----------+-------+--------+-------+--------+--------+--------+------+
|          | 2002  | R      | 2003  | Es     | 2004   | Fo     | UOM  |
|          |       | evised |       | timate |        | recast |      |
+----------+-------+--------+-------+--------+--------+--------+------+
|          | USDA  | Post   | USDA  | Post   | USDA   | Post   |      |
|          | Off   | Es     | Off   | Es     | Of     | Es     |      |
|          | icial | timate | icial | timate | ficial | timate |      |
|          | \[    | \      | \[    | \      | \      | \      |      |
|          | Old\] | [New\] | Old\] | [New\] | [Old\] | [New\] |      |
+----------+-------+--------+-------+--------+--------+--------+------+
| Market   |       | 0      |       | 0      |        | 0      | MM/  |
| Year     |       | 6/2002 |       | 6/2003 |        | 6/2004 | YYYY |
| Begin    |       |        |       |        |        |        |      |
+----------+-------+--------+-------+--------+--------+--------+------+
| Area     | 3550  | 3550   | 3450  | 3450   | 3450   | 3500   | (    |
| H        |       |        |       |        |        |        | 1000 |
| arvested |       |        |       |        |        |        | HA)  |
+----------+-------+--------+-------+--------+--------+--------+------+
| B        | 753   | 623    | 773   | 530    | 673    | 500    | (    |
| eginning |       |        |       |        |        |        | 1000 |
| Stocks   |       |        |       |        |        |        | MT)  |
+----------+-------+--------+-------+--------+--------+--------+------+
| Pr       | 7300  | 7200   | 6900  | 6900   | 7000   | 7100   | (    |
| oduction |       |        |       |        |        |        | 1000 |
|          |       |        |       |        |        |        | MT)  |
+----------+-------+--------+-------+--------+--------+--------+------+
| TOTAL    | 29    | 20     | 200   | 290    | 50     | 150    | (    |
| Mkt. Yr. |       |        |       |        |        |        | 1000 |
| Imports  |       |        |       |        |        |        | MT)  |
+----------+-------+--------+-------+--------+--------+--------+------+
| Oct-Sep  | 85    | 60     | 150   | 290    | 50     | 150    | (    |
| Imports  |       |        |       |        |        |        | 1000 |
|          |       |        |       |        |        |        | MT)  |
+----------+-------+--------+-------+--------+--------+--------+------+
| Oct-Sep  | 0     | 0      | 0     | 0      | 0      | 0      | (    |
| Import   |       |        |       |        |        |        | 1000 |
| U.S.     |       |        |       |        |        |        | MT)  |
+----------+-------+--------+-------+--------+--------+--------+------+
| TOTAL    | 8082  | 7843   | 7873  | 7720   | 7723   | 7750   | (    |
| SUPPLY   |       |        |       |        |        |        | 1000 |
|          |       |        |       |        |        |        | MT)  |
+----------+-------+--------+-------+--------+--------+--------+------+
| TOTAL    | 509   | 510    | 100   | 20     | 50     | 50     | (    |
| Mkt. Yr. |       |        |       |        |        |        | 1000 |
| Exports  |       |        |       |        |        |        | MT)  |
+----------+-------+--------+-------+--------+--------+--------+------+
| Oct-Sep  | 504   | 500    | 100   | 20     | 50     | 50     | (    |
| Exports  |       |        |       |        |        |        | 1000 |
|          |       |        |       |        |        |        | MT)  |
+----------+-------+--------+-------+--------+--------+--------+------+
| Feed     | 5900  | 5900   | 6200  | 6300   | 6200   | 6300   | (    |
| Dom.     |       |        |       |        |        |        | 1000 |
| Con      |       |        |       |        |        |        | MT)  |
| sumption |       |        |       |        |        |        |      |
+----------+-------+--------+-------+--------+--------+--------+------+
| TOTAL    | 6800  | 6803   | 7100  | 7200   | 7100   | 7200   | (    |
| Dom.     |       |        |       |        |        |        | 1000 |
| Con      |       |        |       |        |        |        | MT)  |
| sumption |       |        |       |        |        |        |      |
+----------+-------+--------+-------+--------+--------+--------+------+
| Ending   | 773   | 530    | 673   | 500    | 573    | 500    | (    |
| Stocks   |       |        |       |        |        |        | 1000 |
|          |       |        |       |        |        |        | MT)  |
+----------+-------+--------+-------+--------+--------+--------+------+
| TOTAL    | 8082  | 7843   | 7873  | 7720   | 7723   | 7750   | (    |
| DIST     |       |        |       |        |        |        | 1000 |
| RIBUTION |       |        |       |        |        |        | MT)  |
+----------+-------+--------+-------+--------+--------+--------+------+