Turkey's Flour Industry Adapts to War-Driven Volatility

Turkey's flour industry is facing challenges due to the ongoing conflict between Russia and Ukraine. Mehmet Mesut Cakmak, leader of the Turkish Flour Industrialists Federation, noted that premiums for war-risk coverage have increased to 2% of a ship's worth, and transport costs for Ukrainian grain have risen from $42 to $54 per metric ton in just a few weeks.

The Platts Milling Wheat Marker, a key price gauge, has fallen 5.7% since July, driven by subdued FOB demand and hesitant vessel operators. However, Turkey's exceptional local crop has protected its market, even as processors contend with steeply rising shipping and insurance expenses.

To adapt to these pressures, millers in Turkey are synchronizing their raw material acquisitions with sales commitments, broadening their supplier base, opting for shorter delivery terms, and maintaining adaptability in logistics. Cakmak emphasized that Turkey's strengths lie in product quality, dependability, and the flexibility to serve varied client requirements.

Turkey is striving to hit its 3 million metric ton export goal for 2026, following 2.345 million metric tons shipped in the prior year. Promising indicators include a 37% jump in April exports and a notable rebound in demand from Syria. However, rivalry is mounting, especially from Egypt, which leverages its weaker currency and attractive pricing in African and Middle Eastern markets.