Turkey has removed its sunflower oil import tax through to July, in response to a large increase in import prices and the lira's depreciation, as well as tighter supply from both exporting countries and the domestic market. The import duty on sunflower oil has been reduced to 0pc from 10pc until 30 June, according to a presidential decree. The rate was initially cut to 3pc in November, with a domestic housing fund levied on imports reduced to €60/t from €280/t, before being raised to 10pc in December. The cut also applies to rapeseed, rapeseed oil, safflower and safflower oil for the same period. The import tax is planned to be lifted back to its original rate of 36pc on 1 July. The move comes after Turkey eliminated import duties on grains through to December in October, and then reduced to zero import duty on sunflower seeds at the start of November, with the zero tariff to be valid through to July.
Turkey is trying to deal with a steep rise in the cost of imported goods, following higher prices on the global market this season, as well as the lira's depreciation against the dollar, which has increased local food and feed prices. Domestic sunflower oil prices — the most consumed vegetable oil in Turkey — rose by 40pc on the year in 2020, data from Turkish statistical institute Tuik show. Turkey is the world's biggest importer of sunflower seeds, which are used to meet the needs of the large domestic crushing industry, which has a capacity estimated at 9mn t. Turkish sunflower oil production is expected by the US Department of Agriculture (USDA)to edge down to 1.11mn t in the 2020-21 agricultural year from 1.14mn t in 2019-20.
And Turkey's sunflower oil consumption is forecast to rise to 1.19mn t in 2020-21 from 1.14mn a year earlier. Turkish sunflower seed imports are expected to reach 1.2mn t in the 2020-21 agricultural year, broadly unchanged on the year. In the 2020 calendar year alone, sunflower seed imports rose to 1.15mn t, up by 0.8pc on the year, with Russia, Bulgaria and China providing the largest amounts, Turkish agricultural ministry data show. Sunflower seed imports rose despite tighter supply. Global sunflower seed production in the 2020-21 agricultural year is expected to hit a four-year low of 49.97mn t, against 54.88mn t a year earlier, the USDA estimates.
2021-22 agricultural year
Turkish supply concerns could start to ease in the 2021-22 agricultural year, with domestic sunflower seed production expected to reach 1.8mn t during the period, against 1.56mn t in 2020-21. This has come amid improved soil moisture this winter in the Thrace region in particular, where around half of the local sunflower seed crop is grown. Domestic sunflower planting is due to take place in April-May. And steady depreciation of the domestic currency could disincentivise further imports. The lira was trading at TL7.90:$1 at time of publication, weakening from TL7.77:$1 yesterday and considerably below TL7.22:$1 at last week's close, following the removal of Naci Agbal from his position as Turkey's central bank governor over the weekend.