Home / Commodities / Freight News / Temporary Turkish import tariff cut opens opportunities for European rice exporters

Temporary Turkish import tariff cut opens opportunities for European rice exporters

European market participants anticipate that a recent temporary reduction in Turkish rice import tariffs is likely to increase Japonica sales from the continent.

The Turkish Grain Board, or TMO, confirmed to S&P Global Platts that the import tariffs on paddy, brown and milled rice have been lowered from 34%, 36% and 45% to 5%, 10% and 15%, respectively, until April 30. While Turkish production in 2020 decreased slightly year on year, the TMO cited the weakness of the lira against the dollar as the primary rationale behind the policy. The lira is 22% weaker against the dollar year on year, as of Jan. 11, and 63% weaker than it was five years ago.

The temporary change in policy is likely to benefit European exporters in particular due to the relatively small window of opportunity to benefit from the policy, in addition to adequate stocks on the continent. According to multiple brokers, inquiries for Italian Baldo rice have spiked in recent days. One such broker remarked that while Turkish buyers had been resisting offers of milled Baldo at around Eur840-860/mt CFR Mersin in the run up to the tariff reduction, buyers are now eager to conclude trade at these levels. Other European origins, such as Greece, are also likely to benefit from the policy.

An additional 25% retaliatory import tariff on US rice remains in place, which is likely to limit sales of Californian medium grain during this four-month window. However, one participant involved in large volume paddy sales to Turkey in the past remarked to Platts that they “don’t see any business happening anytime soon from California to Turkey, even if the retaliatory duty was removed” due to uncompetitive Calrose prices.

While Japonica rice exporters in South America would also typically benefit from this sort of reduction, they are unlikely to this time around due to tight stocks ahead of harvesting. According to a major Uruguayan exporter, Turkish inquiries have increased in recent days, but it is “not possible” for new crop to arrive in Turkey by April 30 and they “have no stock” left to sell.

Due to the increasing price sensitivity in the Turkish market, sellers of Chinese old crop Japonica and Russian Rapan rice will also likely benefit from the policy. While Indian Swarna rice exporters could also benefit, ongoing container shortages in the country are likely to delay execution, making it doubtful that Indian rice could reach Turkey by April 30.
Source: Platts

Recent Videos

Hellenic Shipping News Worldwide Online Daily Newspaper on Hellenic and International Shipping