Turkey to allow TMO to buy grain outside tenders
Turkey’s government said June 10 that it will allow the state grain board to bypass the tender process for its wheat purchases, replicating a recent move by Egypt, as the world’s major wheat importers are forced to consider new responses to the surge in prices.
“It is possible for [TMO, the state grains board] to purchase directly from listed companies, from organizations with partnerships of foreign states,” the government announced in its official gazette.
The surge in wheat prices was prompted by Russia’s invasion of Ukraine, which removed the Black Sea’s second-largest producer of the grain. However, the full effect will be felt most keenly following the harvest — from July — when most of the new crop is typically exported.
Data from IHS Markit shows that Ukraine’s wheat exports since 2019 have averaged 2.9 million mt/month in the first three months of the marketing year (July, August and September).
Until now, TMO has bought all its imported wheat through tenders. Its most recent tender for imported wheat was on April 29, when traders said the board made provisional purchases of 480,000 mt of wheat, with the lowest-priced parcel offered at $409/mt ex-bonded warehouse for 12.5% protein wheat. However, TMO cancelled those purchases a day later, and several Geneva-based traders said that TMO had requested offers below $400/mt CFR Turkey.
According to media reports in April, Egypt’s government wants to invite companies to submit grains offers directly to the Supply Ministry, as well as allowing direct purchases. Egypt’s state grains board GASC is the world’s largest importer of wheat and its tenders are seen as pricing benchmarks.